Alphabet's HubSpot acquisition is dead in the water

Alphabet’s proposed HubSpot acquisition may have reached the end of the road as sources claim the firm has abandoned its pursuit, according to reporting by Reuters. 

A person familiar with the matter said that talks surrounding the acquisition had never progressed to the due diligence stage and began to unravel a number of weeks prior. 

The source, who did not reveal their identity or relationship with either of the two companies, said the deal collapsed not long after initial discussions were held. 

News about plans for the deal first broke in April earlier this year, with people familiar with the matter claiming that Alphabet had been in talks with advisors about the potential of making an offer. 

HubSpot had a market value of $35 billion at the time and, even though it's currently valued lower, would still represent Alphabet’s biggest ever acquisition if it had moved forward.  

According to sources at the time, Alphabet met with investment bankers at Morgan Stanley regarding the potential offer, reportedly discussing how much the offer for HubSpot should be. 

Alphabet also reportedly discussed whether or not antitrust regulators would be likely to scrutinize the deal given its size and the extent to which regulators have been targeting mergers with increasing ferocity.

"As standard practice, HubSpot does not comment on rumors or speculation. We continue to focus on building a great business and serving our customers," a HubSpot spokesperson said at the time.

Alphabet had not submitted an offer at the time and now, as sources have confirmed, the deal looks like it may not be progressing any further.

HubSpot acquisition would've given Alphabet a data goldmine

The thinking behind the acquisition is not entirely clear owing to the unofficial nature of the deal’s proceedings, though Alphabet’s acquisition would have expanded Google’s offering customer relationship management (CRM) software market.

Similarly, it would have provided an extension of Google's cloud capabilities while also giving the firm access to a wealth of data needed to bolster the money made from its advertising business.

HubSpot has a wealth of conversion data, which can link sales to certain advertisements, and it could be worth a reasonable amount to a company like Google. 

In a statement given to ITPro at the time, Tyler Jordan, CEO of JDM, a B2B-focused marketing agency, said the deal would’ve proved lucrative for Google advertisers. 

“This acquisition would allow B2B companies to scale more quickly by closing the loop on enhanced conversions and offline conversion tracking,” he said. “Which is an advanced measurement initiative that’s currently muddled and doesn’t lead to clear growth paths.”