Jeff Greenfield is a marketer. He has 4x more followers than I do on LinkedIn. And, I’d hazard to guess about 10x more grey matter than I do upstairs. Apologies Jeff if ten seems low. I ran out of fingers and I was wearing shoes. As many of you may have heard, there’s a rumor that Google may buy HubSpot. For no apparent reason (at least to me), Jeff emailed for my thoughts. Hey, Jeff, watch me pull a rabbit out of my hat. Nothing up my sleeve… this time for shoor.
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The loquaciousness of my reply sucked all the thoughts and words out of me. So, I turned it into this column. You’ll find Jeff’s ample contributions chuff-worthy. I did.
First off, I don’t see an ah-ha-y, single silver-bullet reason for this deal. Which is why so many people have so many ideas. Jeff’s idea makes sense. HubSpot plus G Suite is nice. Google getting slightly more access to hundreds of thousands of SMB is slightly below that on the rank list. I still like my idea that Google needs more stuff to train its AI. And, lots of emails are a decent place to start. Judy Shapiro’s theory about Google needing actual people to serve customers is the best single idea and wonderfully contradictory idea I’ve heard.
But, none, no reason individually or even collectively moves the needles on, “Why this deal?” or “Why right now?”
HubSpot is worth $34B. Normally, Google would have to pay a 30-40% premium for it. Round it up and call it an even $50B. That’s four times more than Google’s biggest acquisition ever. Motorola. Which may also be Google’s biggest bust. Which sort of looked like a desperate deal to reach for something when they worried the mobile world would pass them by.
And, I think that leads us to Google’s (perhaps) want to buy HubSpot. They think they’re in REAL trouble.
The diminishing “value from,” or is it, “interest in,” the quality of digital that run on open web is especially bad for Google. That’s bread, butter, motherhood, apple pie, and kitchen table issue for them. If/As/When those ads dry up, a big part of their business is gone. And, worse for them, a big chunk of their margin.
Google doesn’t dominate AI the way they dominate search. Again, worse for them, AI is antithetical to their core search business. Search is a mountain and Google controls who sees the top. That velvet rope is their business. AI flattens the landscape. Without a need to play SEO games, what happens to Google? Whatever it is, it ain’t pretty.
The only mountain left is the mountain of Google’s recent missteps. The botched Gemini rollout, the deal with Reddit, its 180-degree turnaround on firing employees who don’t like who buys Google’s cloud services,… all of it… supports the notion that either Google is in trouble or thinks they are.
Which means… Google is looking to buy things. Anything. Even HubSpot. As a former private equity guy, I know how easy it is to talk yourself into reasons to buy things. I’ve done it. I have a feeling this is what’s going on at Google.
If I had any money, it would be on Google buying Reddit. Way cheaper than HubSpot. Way more central to Google’s search and AI businesses.
That, in a nutty shell, is what I wrote back to Jeff.
Who, of course, explained his real thinking, and graciously allowed me to share it here. It’s brilliant. And, suggests we’re all barking up the wrong tree.
Reminder, Jeff is a marketer. Which means, innately, he wants to be at the “Center of the action” or “In the midst of the conversation.” The best messaging goes where people are about to buy something.
For a long time, as customers we accepted a circuitous journey from discovery to purchase. We’d go to Golf.com, read about the Masters, see an ad for coffee table books, and rush on over to Amazon to buy one. Google put the ad on Golf.com.
Jeff tossed this factoid wiffleball into the air, “Now my store is on Amazon or Walmart and people are searching there.” And, then he hit it out of the park with an oversized fungo, “The people searching there completely bypass Google.”
“Bypass Google.” Wowzers. That’s bigger than the 495-spur that lets people bypass Washington, DC.
He added that the same holds for TikTok (TikTok shops) and that Meta will expand into direct purchase. Which leads him — and, now, us, thanks to him — to this conclusion, “Google needs to get into that last mile of commerce.”
Jeff has run some numbers. Costco would have been an option. But it’s gotten too expensive. BJ’s Wholesale is the Reddit price range. Which is $10B today. He said other options are Shopify and Etsy. Shopify is worth $120B+. Etsy is $8B.
So, I’m going to combine three thoughts. Google thinks they need to do something. Buy something. Google has a history of making their biggest deals when they think their backs are to the wall. It’s more likely to be a retail deal than HubSpot or a data/media deal.
Depending on Google’s unmedicated level of anxiety, they could go small-ish for them with Etsy or BJ’s. Or, they could go HUGE with Costco ($300B+) or Shopify ($200B+).
I’ll toss one more log on the fire. Instacart. Shopping plus ads. Also, around $10B.
Oh. I dunno my own strength. Presto.