Alphabet – Google’s parent company – has engaged in talks with HubSpot to acquire the CRM giant, according to Bloomberg sources.
The development – shared by "people familiar with the matter" - follows reports that Alphabet drafted in advisers last month to mull over an offer.
It also comes at a time when Google is assessing additional growth engines – as it faces new competition in its traditional search business.
Alphabet has the free funds to invest heavily in such growth engines, boasting a cash pile of $110.9BN as of January 1, 2024.
With these funds, it could snap up an enterprise tech juggernaut like HubSpot - which has a market cap of $30.0BN (as of April 9, 2024) - three times over.
Yet, prominent CX analysts have cited the increased regulatory scrutiny of big tech in the US as a perhaps critical blocker to the deal.
Indeed, Liz Miller, VP & Principal Analyst at Constellation Research, told CX Today: "Given Google's dominant position in the advertising industry and the current legal challenges it faces, the acquisition could raise significant antitrust concerns.
If Google were to control both the search engine that drives traffic and the CRM that manages customer relationships, it could create a potentially anti-competitive environment.
Beyond the regulation, Google must consider where HubSpot fits within its broader CX stack – which includes CCaaS, virtual agent, conversation intelligence, and other platforms.
Piecing all this together within a coherent roadmap - which it can action - is a significant challenge.
However, with the great risk comes great reward. As Miller stated: "If Google goes through with this, it could shift the balance in the CRM market.
HubSpot has focused on the mid-market and SMB segments, where Google might not have a strong presence. This acquisition could give Google access to a new customer base, but it could also disrupt HubSpot's existing business model.
"Google will need to consider whether it can successfully integrate HubSpot without alienating its customers or attracting further regulatory scrutiny."
