Google LLC parent Alphabet Inc. is interested in acquiring Fitbit Inc., sources close to the matter told Reuters and CNBC today.

Negotiations between the companies are said to have advanced to a point where the search giant presented a concrete buyout bid to Fitbit.

The tipsters didn’t say when the proposal was made, nor how much the company is offering. But any deal would most likely be in the 10-figure range given that the smartwatch maker was valued at more than $1 billion last week.

Wall Street seems to be optimistic that the acquisition will materialize. Fitbit’s stock price jumped as much as 41% on the news today, rising so fast that trading was suspended for a brief period. 

San Francisco-based Fitbit played a formative role in the creation of the wearables market and continues to be one of the leading players to this day. It sells a line of smartwatches that primarily serve as fitness trackers, enabling the user to view data such as the number of calories they burned during a jog, how many steps they made and the distance they covered. The devices also provide additional features such as integration with Amazon.com Inc.’s Alexa voice assistant.

Demand for Fitbit watches has taken a hit recently from competition from Apple Inc. and other rivals. In July, the company warned shareholders that it expects third-quarter sales to drop 10% to 15% year-over-year to between $335 million and $355 million.

Even with Fitbit’s expected revenue decline, buying the company would give Google a sizable presence in the wearables market. The search giant distributes a version of Android for wearables that has been adopted by some hardware makers, but doesn’t have any devices of its own in the category with the exception of Google Glass. Fitbit’s smartwatches would enable Google to open a new front against Apple, with which it already competes in smartphones, tablets and notebooks.

Another factor that may lie behind the reported acquisition offer is the search giant’s healthcare vision. Verily, Alphabet’s heavily-funded life sciences subsidiary, is using wearables as part of its clinical research, while Fitbit has been adding more health monitoring features to its smartwatches. Fitbit’s Health Solutions group posted three times the growth rate of the company as a whole in the second quarter and is expected to hit the $100 million revenue mark this year. 

Photo: Andri Koolme/Flickr