Google’s parent company Alphabet has reportedly failed to acquire cybersecurity startup Wizz Inc. despite making a $23 billion acquisition offer.
This unexpected choice demonstrates the New York-based startup’s bold and ambitious determination to forge its own path.
(Photo: Pawel Czerwinski via Unsplash) As Google CEO Sundar Pichai recently stated, further job cuts are expected in 2024. The same fate recently befell Alphabet’s secretive lab, X.
The move comes as Alphabet strives to expand its presence in the fiercely competitive cloud-services sector currently dominated by Amazon.com Inc. and Microsoft Corp.
Despite the hefty offer, Wizz is focused on hitting new benchmarks, including $1 billion in annual recurring profits. By turning down Alphabet’s huge offer, Wizz demonstrated its commitment to its growth trajectory and confidence in the capabilities of its employees.
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What a failed acquisition could mean for Alphabet
The move represents a major blow to Alphabet, which acquired Mandiant for $5.4 billion two years ago to bolster its security offerings, and the merger with Wiz may have been a calculated effort to bolster its cloud security offerings.
Wiz’s technology was meant to be a useful complement to Alphabet’s services, as it works with cloud storage companies such as Microsoft Azure and Amazon Web Services to scan data for security threats.
An acquisition of this magnitude by a giant like Google would be unprecedented and would likely be subject to antitrust scrutiny. Google was already embroiled in several antitrust disputes, including a lawsuit brought by the U.S. Department of Justice, and so could encounter further regulatory hurdles.
Google and Hubspot
While several analysts have recently said they don’t think Alphabet’s acquisition of HubSpot will have a negative impact on competition, regulators may disagree, forcing Google’s parent company to fight antitrust laws on another front.
Alphabet could buy HubSpot, which is valued at $34 billion, according to sources, though Google is still analyzing whether the acquisition would violate antitrust laws before making a choice.
Many industry observers and antitrust experts worry that Google’s acquisition of HubSpot will reduce competition, as they argue that HubSpot competes in a customer relationship management (CRM) software market dominated by Salesforce, Adobe, Microsoft and Oracle.
Analysts speculate that given that Google does not compete directly in the CRM market, the acquisition could strengthen HubSpot’s competitive position by leveraging Google’s cloud computing resources to expand its customer-facing services and pricing.
Despite these observations, many expect the Google-HubSpot deal will be challenged by antitrust authorities in the U.S. and Europe, who are becoming less likely to approve acquisitions by computer companies, which could lead to a lengthy and bitter legal battle for Google.
Antitrust enforcement officials would likely oppose such a merger, said Seth Bloom, a former general counsel for the Senate Antitrust Subcommittee.
Google has been accused by the U.S. Department of Justice of abusing its dominance in search and digital advertising, among other antitrust violations.
EU investigators began looking into Apple, Google and Meta in March under new regulations aimed at weakening the dominance of big tech companies in digital markets. The European Commission, the executive branch of the 27 EU member states, is investigating the companies for “non-compliance” with digital market laws.
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