Google’s parent company, Alphabet, is reportedly making significant strides in its bid to acquire HubSpot, a marketing software firm valued at $30 billion. If successful, this acquisition would mark Google’s largest deal to date and could be a key strategy in its ongoing competition with Microsoft in the cloud applications market.

According to Derrick Wood, an analyst at Cowen, this potential acquisition aligns with Google’s broader goal of gaining market share from Microsoft, particularly within the productivity suite segment. “Google appears to be positioning itself to take market share from Microsoft. Acquiring HubSpot would enable them to bundle applications for their clients,” Wood noted in a research report shared with Reuters.

Currently, Google ranks as the third-largest cloud services provider, but its market share is less than half of Microsoft’s. Amazon continues to lead the market, holding approximately a third of the global share.

The first reports of Google’s interest in HubSpot surfaced in April, sparking a significant increase in HubSpot’s stock price, which jumped by as much as 11%. Despite this, analysts remain cautious, pointing to a decline in demand for HubSpot’s products, even though the company’s financials have been on the rise. HubSpot reported a $6 million profit in the first quarter, with sales up over 20% from the previous year. Discussions between Google and HubSpot are ongoing, but no final agreement has been reached, according to Bloomberg.

While Google may trail behind Microsoft in the cloud market, the two companies are more evenly matched in the rapidly evolving AI sector. Over the past year, Google, Microsoft, Meta, and Amazon have all launched significant AI applications, features, and custom AI chips. Google made a notable splash with its updates to the Gemini AI suite during its I/O developer conference, solidifying its position as a major AI player. Microsoft, despite introducing its own AI innovations, is currently under scrutiny from European regulators.

In This Story:

• GOOGL: +0.95%
• HUBS: +0.98%
• MSFT: +1.17%
• AMZN: +1.31%
• META: +1.04%