Google parent Alphabet scrapped plan to acquire HubSpot weeks ago, source says

Google parent Alphabet shelved plans to acquire online marketing software firm HubSpot weeks ago, a source cited by Reuterssaid on Wednesday.

The talks never reached a due diligence stage and collapsed weeks after initial conversations, the source said, on condition of anonymity to discuss confidential matters.

On Wednesday, shares of HubSpot plunged by 12 per cent, while shares of Alphabet were up 1.2 per cent. Reuters had reported in April about Alphabet's plan to bid for HubSpot with the help of advisers.

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A deal for HubSpot, now valued at $25 billion, had the transaction gone forward, it would have been Alphabet's largest deal on record. However, such a large purchase would likely have attracted scrutiny from antitrust regulators. US authorities have grown very queasy about letting large technology firms expand further through acquisitions.

HubSpot is a marketing software company aimed at small and medium-sized businesses. The company's strategy is to get customers involved in a business brand using inbound marketing, where customers start engagement with a brand. The software offered by the company enables customers to produce interactive advertising content.

During the company's financial results call in May, HubSpot CEO Yamini Rangan emphasised that customer demand was fading. This decrease is attributed to small businesses fearing the economic implications of high interest rates.

It had earlier been reported by Bloomberg that Google pulled out of talks to buy HubSpot. The decision of Alphabet to abandon this deal mirrors, at a larger scale, the broad regulatory and market challenges that large technology companies face when contemplating major acquisitions.