Alphabet's decision to abandon plans for acquiring HubSpot causes software company's stock to drop 13%.

• HubSpot shares plunged on news Alphabet is shelving interest in an acquisition.
• According to Bloomberg, there were no in-depth talks about due diligence.

On Wednesday, shares of the company plummeted 13% after it was reported that the company had abandoned its plans to acquire the software company.

Bloomberg reported that Alphabet and HubSpot were in talks earlier this year, but the discussions did not progress to the stage of detailed due diligence, according to sources.

Neither HubSpot nor Google's parent company responded promptly to a request for comment.

Recently, regulators in the U.S. and abroad have opposed large technology companies' proposed deals. For instance, Amazon abandoned its acquisition of robot vacuum maker iRobot, and Microsoft took 20 months to close its purchase of game publisher Activision Blizzard.

Google could have increased its revenue from business software by acquiring HubSpot, which helps small and medium-sized businesses automate their marketing and reach potential customers.

Google's cloud unit reached profitability in 2023 after years of hefty investment.

Recently, HubSpot has experienced more rapid growth than Google, with the company reporting revenue growth of over 20% in the past six quarters and over 30% before that. In the first quarter, sales increased by 23% to $617.4 million.

Since 2021, Yamini Rangan, a former executive from Dropbox and Workday, has been running HubSpot. In March, she highlighted the challenging business environment, stating that for the first time, there were "more proof of concepts before customers were ready to make purchase decisions."

Since early 2022, the alphabet hasn't experienced growth of more than 20%. In the most recent period, revenue increased by 15% from the previous year to $80.54 billion.

Google has faced accusations from the U.S. Justice Department and a group of state attorneys general for violating anti-monopoly law by having exclusive agreements with phone manufacturers and browser companies to make its search engine the default option for consumers.

Despite a decline in stock price on Wednesday, HubSpot's market cap remains at $25 billion, surpassing Google's largest acquisition, Motorola Mobility, which cost $12.5 billion in 2011.

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