Google Close to Its Biggest Acquisition Ever, Despite Antitrust Scrutiny
Google, which became one of the world’s the most valuable companies through its search engine and other consumer internet services, is nearing its largest-ever acquisition to improve what it can offer to business customers.
Google is in talks to buy Wiz, a New York-based cybersecurity start-up, according to three people with knowledge of the discussions, who were not authorized to discuss them. Wiz was last valued at $12 billion.
The companies have valued the deal at roughly $23 billion, said one of the people, easily making it Google’s most expensive acquisition and nearly double what the company paid for Motorola Mobility in 2012.
While a deal looks likely, talks could still fall apart, the people said.
Google and Wiz did not respond to requests for comment. The Wall Street Journal earlier reported that the companies were discussing a deal.
Google has moved forward with negotiations despite the possibility that regulators might try to block the deal. But the company may be willing to fight to beef up its cloud-computing division, which lags behind Amazon Web Services and Microsoft Azure.
Google was sued by the Justice Department in two separate antitrust cases, one targeting its ubiquitous search engine and another seeking to break up its digital advertising-technology business. A verdict in the search case is expected this summer.
Regulators under President Biden have taken a hard line against acquisitions by all the tech giants and corporate consolidation in general. It blocked deals such as the publishing giant Penguin Random House’s $2.18 billion acquisition of rival Simon & Schuster and JetBlue’s $3.8 billion acquisition of Spirit Airlines. Amazon abandoned its $1.7 billion acquisition of iRobot following pushback from European and U.S. regulators. And the Federal Trade Commission unsuccessfully sued to block Microsoft’s acquisition of the video game company Activision.
For years, Google executives have focused on making money outside of online advertising, but Google search, YouTube and its other platforms still bring in three-quarters of Google’s revenue. Buying Wiz would not move the needle overnight, but would forge a connection between Google Cloud and companies that use Wiz to safeguard data held in AWS, Azure and other cloud computing systems.
Such a splashy purchase would be unusual for Google, which has been cautious about large acquisitions. Less than two years after buying Motorola for $12.5 billion, Google sold it to the computer maker Lenovo — at a loss. More recently, in 2021, Google paid $2.1 billion for the fitness tracker company FitBit, a deal that also faced regulatory scrutiny before it was approved.
Google has made a number of acquisitions to improve what it can offer to cloud computing customers. In 2022, it bought Mandiant, a cybersecurity company, for $5.4 billion. The same year, it bought Siemplify, another cybersecurity firm.
Thomas Kurian, the chief executive of Google Cloud, has led the push to buy Wiz, one of the people familiar with the talks said. He has sought to make cybersecurity a distinguishing strength of his division, and Wiz would go a long way to helping with that. The start-up tries to help corporate customers, including BMW, Slack and Morgan Stanley, reduce security threats when they use cloud-computing services.
Wiz, which was founded in Israel in 2020 and is now headquartered New York, said in May it had raised $1 billion in funding and was now valued at $12 billion. The company has grown rapidly. Earlier this year, it said it had $350 million in annual recurring revenue, up from $100 million two years earlier.
Wiz’s investors include Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital.
