San Francisco (AP) – Google Faced with a potential split in the Internet empire, it has also signed a deal to buy cybersecurity firm Wiz for $32 billion, the largest acquisition ever by the tech giant.
Proposed acquisitions It was announced on Tuesday It is part of Google’s aggressive expansion into cloud computing during the artificial intelligence boom. Frenzy is driving demand for data centers that provide the computing power of AI technology and strengthening competition in that area between Google and two other tech powerhouses, Microsoft and Amazon.
If full speed trading is approved by regulators, Wiz will join Google Cloud. This is an increasingly important part of the business apart from the search and advertising business, which accounts for most of the annual revenue of Google’s parent company Alphabet.
However, with the advent of AI, the cloud division has become a rising star of Google. The sector’s annual revenues were $26.3 billion in 2022, up 64% last year to $43.2 billion.
With, a five-year-old startup founded by four longtime friends who met in the Israeli Army when he was still a teenager, is on track with an estimated $1 billion in revenue this year. After starting in Israel in 2020, Wiz currently oversees an operation that creates security tools to protect information stored in data centers from its current headquarters in New York.
“Both Wiz and Google Cloud are spurred by the belief that cloud security needs to be easier, more accessible, more intelligent and democratized, allowing more organizations to adopt and use cloud and AI safely.” I wrote it in a blog post.
During a conference call Tuesday, Google CEO Sundar Pichai predicted the addition of Cloud Division’s Wiz will further improve security at a lower cost than it can currently offer. This forecast could be aimed at regulators who are likely to scrutinise how transactions affect competition and pricing, as well as future customers.
Google eventually settled on a richer price before courting WIZ for a while. Reported a bid of $23 billion It was rejected last July. At the time, Wiz signaled that instead he would return to the previously planned initial public offering. However, recent stock market volatility has cooled the IPO market, and now Rappaport said he expects Wiz to “innovate even faster” by becoming a part of Google.
Wedbush analysts have purchased “A Shot Adrow the Bow” from Google’s Move To To Buy Wiz from other tech giants, especially Microsoft and Amazon. Google was behind the competition in the cloud space, Wedbush said, but the acquisition of Wiz could change parameters.
Tuesday’s bid easily overturns the biggest acquisition of Google’s current 26-year history. This is the $12.5 billion acquisition of Motorola Mobility in 2012, which didn’t pay off the way Mountain View, California wanted. According to financial information service Mergermarket, Wiz’s $32 billion purchase fell as the biggest cybersecurity acquisition of all time, ranking one of the 20 most expensive acquisitions of all time software companies.
Investors responded calmly to Tuesday’s news, as frequently as expensive acquisitions. Alphabet’s shares fell 2% to close at $160.67.
Some of Google’s other acquisitions have been transformed into gold mines. Most notably, the $1.76 billion purchase of online video pioneer YouTube in 2006 and the $3.1 billion acquisition of the $3.1 billion ad technology platform DoubleClick in 2008.
Google’s DoubleClick transaction is currently part of an antitrust case filed by the US Department of Justice, targeting Google’s technology to distribute ads throughout the Internet. Arbitration In that caseis expected this year to include allegations that Google illegally abused its power to manipulate digital ad prices.
Regulatory Authorities In the US and abroad It also targets Google.
Last year, a federal judge in another case filed last year by the Justice Department concluded that Google had run a ubiquitous search engine. To an illegal monopoly. The penalty stage of the trial will begin next month.
The Department of Justice seeks responsibilities including Google’s requirements We sell Chrome web browsers It also prohibits consenting with Apple and other companies, making search engines the default tool for finding online information on your iPhone and other devices.
Wiz trading is also common among antitrust regulators. Many hope that the Trump administration will welcome more deals than has happened in the past few years, but have also expressed distrust about the growing big technology. Andrew Ferguson, chairman of the Trump administration’s Federal Trade Commission, is particularly frank about his determination to keep Big Technology a short rope.
The deal raises antitrust concerns due to the potential impact on standalone cybersecurity vendors and the potential disruption of larger rivals. Still, Wedbush analysts say the industry is “ried for integration.”
Antitrust concerns were believed in the reasons why Wiz halted sales talks with Google last year while President Joe Biden’s administration was trying to block various technology deals. Kevin Ketcham and Kevin McCaffrey of Mergermarket Analyst wrote in a memo on Tuesday that both Google and Wiz are confident they will get approval from us under the Trump administration.
“Both sides would not have hit a contract without seeing at least a potential path to closure,” Ketchum and McCaffrey wrote.
However, the Business Watchdog Group Demand Press Education Fund has urged the Trump administration to block attempts to acquire Google. “Now is the time to show the public whether they have the courage to intervene and stop the big fish from getting digged into one of the pond’s biggest fish,” said Emily Peterson Kassin, the group’s corporate power director.
If they get the regulatory green light and meet some of the terms spelled in the agreement, Google and Wiz are hoping that the deal will close in 2026.
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Grantham-Philips reported from New York.
