Google’s biggest acquisition falls over as $35b offer...

Google’s biggest acquisition falls over as $35b offer rejectedLynn Doan and Julia LoveJul 23, 2024 – 4.23pmSaveShareGift this articleListen to this article3 minNew York | Cybersecurity start-up Wiz has turned down a takeover bid of as much as $US23 billion ($34.7 billion) from Google’s parent company, Alphabet, sticking with a plan for an initial public offering.The rejection will come as a blow to Alphabet, which is trying to catch up with Microsoft and Amazon in an intensely competitive cloud services market.Google planned to make Wiz a key part of its fight against Microsoft and Amazon Web Services. BloombergAlphabet, which bought cybersecurity firm Mandiant for $US5.4 billion two years ago in its second-largest acquisition, could have used Wiz to round out its security offerings.The New York-based start-up connects to cloud storage providers such as Amazon Web Services and Microsoft Azure, and scans data stored there for security risks.“Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice,” Wiz chief executive Assaf Rappaport said in a memo to employees seen by Bloomberg News.“Let me cut to the chase,” Mr Rappaport said.Wiz CEO Assaf Rappaport says the company will focus on its IPO plans. Getty ImagesThe company’s next milestones are reaching $US1 billion in annual recurring revenue and an IPO, he said.An acquisition target as large as Wiz would have been unusual for a big tech company like Alphabet, and could have drawn more scrutiny from antitrust regulators.Google already faces several antitrust challenges, including a lawsuit by the US Justice Department accusing it of abusing its dominant position in search, and another one regarding its digital advertising tools.Representatives for Google didn’t immediately respond to requests for comment after normal hours. The Wall Street Journal first reported the rejection.Cloud pushGoogle has sought to build up its capabilities in cybersecurity as a key prong of a strategy to gain share in cloud computing.It still trails Amazon and Microsoft in that market, but the search giant has been gaining ground and that unit reported a profit for the first time last year.The Mandiant deal boosted the tech giant’s credibility in the space. At a conference in Las Vegas this year, Google showcased how its Gemini AI model could be used to help clients analyse threats and address potential vulnerabilities.Eric Doerr, Google’s vice president of cloud security engineering, framed AI as a tool to help companies be more proactive in cybersecurity.“What otherwise would be very manual research tasks” can be aided by AI, he said this year.Wiz gained attention after Alphabet was said to be in discussions to buy it for nearly double its valuation just two months prior.Before the takeover talks, Wiz had been rapidly expanding with acquisitions of its own, and was starting to eye an initial public offering.“The market validation we have experienced following this news only reinforces our goal – creating a platform that both security and development teams love,” Mr Rappaport said in the memo to employees.The company, founded in 2020, was valued at $US12 billion during a May funding round that drew investors such as Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital.Investors and analysts credit Wiz’s meteoric rise to its early identification of cloud security as an uncrowded field with a rich and growing customer base.Wiz says 40 per cent of Fortune 100 companies are its customers, and that it was pulling in $US350 million in annual recurring revenue.Interesting article on the Google Acquisition of Wiz falling through;