News
The Gist
- Deal breakdown and market impact. The anticipated Google-HubSpot merger, which would have been Google's largest acquisition, has collapsed. This news comes amid antitrust pressures and has led to a significant drop in HubSpot's market value, with shares plummeting from $587 to $464.
- CRM preferences shift among small businesses. Sean Parnell of Innovaxis Marketing highlights a trend where small businesses are moving away from HubSpot to more cost-effective solutions like Zoho.
- User sentiments and future outlook. A survey by Jordie van Rijn reveals that while 51% of HubSpot users would remain loyal post-acquisition, 48% were considering alternatives, with privacy and cost concerns being major factors. This underscores the dynamic nature of the CRM market and the importance of regular tech stack audits.
Google-HubSpot is no more.
The biggest merger in Google’s history — and likely tech’s largest this year — won’t happen, according to a Bloomberg report citing sources with knowledge of the matter who yesterday said, "the sides didn’t reach a point of detailed discussions around due diligence."
News of a potential martech-adtech mega merger between the search giant and CRM, marketing and sales provider HubSpot, based out of Cambridge, Massachusetts, surfaced in April. Then, HubSpot, which went public in 2014, had a market cap closing in on $35 billion. Today, it was under $26 billion. HubSpot shares saw a huge dip this week, going from a high of $587 to a low of $464.
This would have been Google's largest acquisition, likely more than doubling the previous winner — $12.5 billion for Motorola Mobility for its Android play in 2011.
Sources told CMSWire in April this merger could have been a strong marriage between CRM, adtech and martech and put Google into the mix against CRM leaders Salesforce and Microsoft.
Many also, on the other hand, told CMSWire they thought this deal was doomed from the start in a tech world under intense antitrust pressure from the federal government.
Navigating the CRM, Marketing Landscape
Fun as acquisitions and mergers talks are, they are just talks. What’s going on in the CRM world as far as the tech goes for some?
Sean Parnell, president of Innovaxis Marketing and a CMSWire Contributor told CMSWire though some are turning from Salesforce to HubSpot, his company is turning people to Zoho from HubSpot because of what HubSpot charges for marketing contacts: too much for small businesses (even with the recent price drop).
“Most small businesses (up to $100m in revenues) just need email marketing, forms and chat — landing pages are better built on your website platform unless you have a bad website resource,” Parnell says. “However, HubSpot’s free CRM is incredible and a better option than Salesforce CRM because of its intuitiveness, and most small businesses just need a simple CRM version because they are not managing large sales forces, and having too many features can actually hurt CRM adoption according to our Salesforce consultant client.”
The real story, Parnell says, may be Salesforce ProSuite vs. HubSpot vs. Zoho. Could ProSuite and Zoho lead to a HubSpot decline with small businesses? Or will ProSuite’s per-user model wind up costing as much as HubSpot’s “overpriced marketing contact model?”
“I’ve just signed up for ProSuite and will be investigating,” Parnell told CMSWire in April. “Anyone unhappy with HubSpot may go to Salesforce plus Pardot/Account Engagement but pay more for a worse interface, Zoho One, or maybe Salesforce ProSuite.”
Here are some observations/usage trends in this arena, according to Parnell.
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HubSpot CRM plus HubSpot Marketing Hub Starter with Zoho pricing for marketing contacts with options to add Sales and Service Hubs. “... We use Zoho for prospecting. Though this is a silo, suspects that become prospects will land in HubSpot,” he said.
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Integration with Google Analytics, Google Search Console, Google My Business, and Moz/SEMRush (especially to see an estimate of your ranking for any keyword).
Related Article: Will Alphabet Acquire HubSpot?
What Would a Google-HubSpot Acquisition Look Like?
With any acquisition, HubSpot users were pretty vocal during the time news of the potential deal hit the wild:
I am a huge fan of @dharmesh and a current @hubspot user for @medicalrecords . I think it would be a very smart move for google.
— Ace Bhattacharjya (@durjoy) April 4, 2024
As a hubspot user I really don't think I want to see Google buy hubspot bc I don't want to trust one of the world's largest advertisers and most data hungry business with my customer list. Too much upside to misuse of that data for Google IMO
— search founder (@n0riskn0r3ward) April 11, 2024
Jordie van Rijn, an independent email marketing consultant. and a CMSWire Contributor, put together a report in April asking 200+ industry experts and HubSpot users about what they would do if there were a Google-HubSpot acquisition.
The results:
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51% would stay with HubSpot, no matter what
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33% would look around at alternatives
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15% would likely leave HubSpot
Van Rijn found that while a significant portion of HubSpot users would have remained loyal through a Google acquisition, citing minimal expected changes or potential benefits, others expressed concerns over potential price increases, slowed platform development and privacy issues.
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“The most remarkable is that 48% would be triggered to look around, or already have one foot out of the door. 15% said they would most likely to leave,” van Rijn wrote in the April 23 report. The potential loss of up to 48% of clients could result in a revenue hit of $325 million to $1 billion, despite HubSpot's high retention rates and contract complexities, according to van Rijn.
It would mean a momentous shift of dynamics in MADTech (Marketing and Ad technology), van Rijn told CMSWire in April.
“I wouldn’t have thought the numbers would be so high, as HubSpot is quite loved,” van Rijn said. “But I can’t disagree. It is smart to look at some HubSpot alternatives and do scenario planning to be prepared. In case this acquisition doesn’t go through (proven right this week) it can always happen the next time around. A regular audit of your tech stack is never a bad idea.”
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