Alphabet Inc. might make an offer for marketing software giant HubSpot Inc., Reuters reported today.

Sources told the news agency that the Google LLC parent has held discussions with Morgan Stanley advisers about the potential acquisition. The price of the deal is among the topics believed to have come up. HubSpot had a market capitalization of $32 billion before the publication of today’s report about the acquisition talks, after which its stock price jumped by more than 4%.

Alphabet’s discussions with Morgan Stanley reportedly also focused on whether a potential deal might win regulatory approval. Over the past few years, several high-profile tech industry acquisitions have drawn antitrust scrutiny. Microsoft Corp., for example, had to revise the terms of its Activision Blizzard acquisition significantly before it received the greenlight from U.K. regulators.

HubSpot launched in 2006 and floated its shares on the NYSE eight years later for $25 apiece. Today, its stock price exceeds $650. A potential acquisition offer would likely value the company’s shares even higher given it was profitable on an adjusted basis last year with double-digit revenue growth.

HubSpot’s flagship offering is a cloud-based platform called Marketing Hub. It allows marketers to create ad campaigns, distribute promotional emails to customers and perform related tasks. In recent quarters, HubSpot has also equipped the platform with artificial intelligence features that automate tasks such as creating webpages.

If an acquisition happens, HubSpot’s technology would bolster Google’s already extensive portfolio of marketing products. Alongside its flagship advertising services, the search giant provides analytics tools that help companies track the effectiveness of their customer acquisition efforts. Last March, Google introduced generative AI features that automate tasks such as designing ads. 

HubSpot also competes in several other areas besides the marketing software segment. For sales teams, it offers a customer relationship management platform that can be used to store data about current and potential buyers. Customer service departments, in turn, can use a HubSpot application called Service Hub to manage their day-to-day work.

The company provides several integrations with Google services. Marketing Hub, for example, enables users to analyze advertising campaign data from Google Ads. The integrations between the companies’ respective products would likely be enhanced following a potential acquisition.

Reuters’ sources said that Alphabet hasn’t yet made a formal offer for HubSpot and there’s “no certainty” it will do so. If the search giant opts against the deal, it could potentially buy one of HubSpot’s numerous competitors in the marketing, sales and customer service software segments. Alphabet had $110.9 billion in cash and cash equivalents at the end of 2023.

HubSpot, for its part, ended 2023 with revenues up 25% year-over-year, to $2.17 billion. The company’s adjusted net income more than doubled in the same time frame. For the current fiscal year, HubSpot is projecting sales in the range of $2.55 billion to $2.56 billion.

Photo: HubSpot