If approved by the regulator, Google could acquire cybersecurity startup Wiz for $23 billion.
Google logo. Photo: Bloomberg.
The New York Times source said that Alphabet, Google’s parent company, is negotiating to acquire Wiz, a New York-based cybersecurity startup (US) for $23 billion. If the information is correct, this will be Google’s largest acquisition, double the record acquisition of Motorola Mobility in 2012.
Based on rumors, the two sides are likely to reach an agreement, but it could still fall apart if stopped by the authorities. However, Google is ready to “counterattack” to increase the strength of its cloud services division, which is lagging behind competitors such as Amazon Web Services and Microsoft Azure.
Previously, Google was sued by the US Department of Justice in 2 antitrust cases, targeting the Google Search search engine and advertising business. The final ruling is expected to be handed down this year.
Under President Joe Biden, the U.S. government has taken a tough stance on technology acquisitions and business mergers in general.
U.S. regulators have blocked book publisher Penguin Random House from acquiring rival Simon & Schuster for $2.18 billion, and JetBlue from acquiring Spirit Airlines for $3.8 billion. Amazon also gave up on acquiring iRobot, while Microsoft struggled to acquire the gaming company Activision after winning a lawsuit against the US Federal Trade Commission (FTC).
Google has many businesses. In addition to online advertising, search services, YouTube and some platforms still contribute three-quarters of total revenue. The acquisition of Wiz may not have immediate results, but in the long run it will create a connection between Google Cloud and companies that use Wiz to protect data.
According to Bloomberg, the negotiations took place shortly after Alphabet abandoned its bid to acquire customer relationship management company HubSpot. Similar to HubSpot, a large acquisition like Wiz is unusual for a company as large as Alphabet, which is closely monitored by antitrust agencies.
Less than two years after acquiring Motorola’s mobile business for $12.5 billion, Google suffered a loss and sold it to Lenovo. In 2021, Google paid $2.1 billion to buy Fitbit, a deal that faced close scrutiny before it was approved.
For the cloud services segment, Google acquired cybersecurity company Mandiant in 2022 for $5.4 billion. That same year, the company acquired Siemmplify and another cybersecurity business.
Wiz was founded in 2020 in Israel. In May, the startup said it had raised $1 billion in funding, valued at $12 billion. Earlier this year, Wiz announced its latest annual revenue of $350 million, up sharply from $100 million two years ago.
Internal sources said that Thomas Kurian, CEO of Google Cloud, represented the negotiations to acquire Wiz, with the goal of making cybersecurity an advantage for Google Cloud. Some of Wiz’s prominent customers include BMW, Slack, and Morgan Stanley.