Implications of Google Buying HubSpot

Shares of HubSpot closed up 5% on Thursday after the news dropped.

What Happened: The second the internet found out that Alphabet, the parent company of Google, was in talks to make a bid for the marketing software company Hubspot…

Well… let's just say investors ran to purchase some shares. 

Background: HubSpot, based in Cambridge, Massachusetts, had a market cap of around $32 billion before the news was leaked by Reuters. The company provides businesses with marketing and customer service software.

Company Synergies: Many corporations track their SEO and Google Analytics data through HubSpot to see how well their site and the blogs or articles within it are performing over time, so the synergies are definitely present between the two companies. 

Potential Implications: Alphabet must be careful as it has faced some major antitrust scrutiny over the past year.

  • The U.S. Department of Justice recently filed its second antitrust suit against Google’s ad business.

  • The first antitrust lawsuit, filed in October 2020, accused Google of unlawfully obtaining a monopoly in the search market.

To make sure no antitrust issues come about this time around, Alphabet is making sure to consult with its financial partner, Morgan Stanley, first before making a potential offer. 

Under the Biden administration, technology conglomerates have found it difficult to pursue mega deals that could cause unfair monopolistic competitive advantages in the industry.

Bottom line: If the acquisition were to go through, it would be the largest in Alphabets history and allow for its mega pile of cash to be put to use, currently at $110.9 billion as of the end of December

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