Google about to take over cybersecurity start-up Wiz for 23 billion dollars

Google's parent company Alphabet is in advanced negotiations to acquire the cybersecurity start-up Wiz for around 23 billion US dollars. It would be the largest takeover in the group's history. This was first reported on Sunday by the US daily newspaper Wall Street Journal.

According to people familiar with the matter, to whom the Wall Street Journal refers, the takeover deal could go through soon. However, failure of the talks is also not ruled out. The takeover of Wiz could strengthen Google's efforts in cloud computing, an important and growing business area in which the company has lagged behind other companies, according to the newspaper.

Wiz with rapid growth

Wiz is based in New York and has other offices in the US and Israel. The company offers cybersecurity software for cloud computing. The company was founded in 2020 after the founders of Wiz sold their first start-up, the Israeli cybersecurity company Adallom, to Microsoft for USD 320 million in 2015. They initially worked at Microsoft for several years before founding Wiz.

Today, Wiz is one of the fastest-growing software start-ups in the world, offering cloud-based cyber security solutions with real-time threat detection and response based on artificial intelligence. According to its website, the company works with a number of the largest cloud companies, including Amazon and Microsoft, as well as Google. Wiz, which is backed by prominent Silicon Valley venture capitalists including Sequoia Capital, Andreessen Horowitz, Index Ventures and Lightspeed Venture Partners, reported revenues of USD 350 million in 2023.

Investments in cloud computing

Unlike some of its major technology competitors, Google has held back on major acquisitions in recent years. For example, Microsoft acquired the career network LinkedIn for USD 26 billion and bought the video game provider ActivisionBlizzard for USD 75 billion. According to the Wall Street Journal, a takeover of Wiz would dwarf Google's biggest deal to date, the USD 12.5 billion purchase of Motorola's cell phone division Motorola Mobility in 2011. However, Google has been working for some time to expand its cybersecurity business with a focus on the cloud. Two years ago, Google acquired the US cybersecurity company Mandiant for almost 5.4 billion US dollars – the second largest acquisition in Google's history.

Google is currently facing antitrust proceedings by the US Department of Justice, which alleges that the company used illegal means to expand its supremacy in internet search. A second antitrust lawsuit, which has not yet been heard in court, concerns Google's dominance in online advertising and unfair practices.

However, Google is not nearly as strong in the market for cloud computing as it is in online search and online advertising, according to the Wall Street Journal. Google is in third place behind Amazon and Microsoft, but is investing heavily in this fast-growing area. Last year, Google's turnover in the cloud business grew by 26 percent according to the newspaper and reported an operating profit for the first time. Should Wiz be acquired, it would be one of the biggest tech deals in recent years.

(akn)