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Google to buy Wiz for $32B

reuters.com

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Re: Google to buy Wiz for $32B

#451

Post by eranation »

dinobones wrote: post #433

This makes no sense. Assume 1,000 customers each generating $2m in ARR with contracts. That’s $2 billion. Assume generous 6x ARR valuation, that’s $12 billion. Where is this $20 billion premium coming from? How could the board approve this? How is this fair to shareholders? Heck, as a minor shareholder in GOOG, I don’t find this financially responsible at all. I can’t help but think sometimes these tech acquisitions…

I have no basis for this thought other than speculation, but I imagine GCP having previously unaccessible data about a lot of AWS and Azure workloads of potential GCP customers, gotta be worth at least something... if a customer is generating 2m ARR for Wiz, how much of ARR they generate to AWS/Azure if they are not a GCP customer? Again, this is just speculation and I have no idea if it has any basis in reality, but this was my first thought back when they made the first offer.

Re: Google to buy Wiz for $32B

#452

Post by breppp »

billjings wrote: post #400
breppp wrote: post #329

Earlier quoted context omitted.

So many sources yet no source of the actually outrageous claim that Google will use this to illegally siphon customer data maybe this deal is about a company with a lot of revenue in an area google is heavily investing in: cloud security?

Facebook did exactly this with a VPN acquisition. They didn't break into customer data; they just mined it for usage patterns. So as a pure speculation on Goog's motives, it doesn't sound farfetched enough to call ridiculous. Competitive data is valuable, particularly if you want to strangle the youth in their cradles (or acquire them).

google is not facebook, and an ad-supported consumer software is not cloud. OP talked about AI training which is a bit more than metadata

also, the vpn example ended in court

Re: Google to buy Wiz for $32B

#453

Post by Taek »

dinobones wrote: post #433

This makes no sense. Assume 1,000 customers each generating $2m in ARR with contracts. That’s $2 billion. Assume generous 6x ARR valuation, that’s $12 billion. Where is this $20 billion premium coming from? How could the board approve this? How is this fair to shareholders? Heck, as a minor shareholder in GOOG, I don’t find this financially responsible at all. I can’t help but think sometimes these tech acquisitions…

How is 6x generous? Alphabet's P/E is 23. That means $2 billion rev implies $46b valuation (assuming high margins)

These deals always have more than meets the eye. Google wouldn't acquire revenue at a fair market price just for revenue's sake - there's some reason they expect to get value beyond the revenue.

That doesn't mean its nepotism. It could be that they think they can triple revenue per customer with some synergy. Or any number of a large set of other possibilities.

If you want to understand this type of transaction better, you can read a book on M&A

Re: Google to buy Wiz for $32B

#454

Post by cess11 »

shilgapira wrote: post #205
cess11 wrote: post #152

Earlier quoted context omitted.

[flagged]

Tel Aviv is not the capital of Israel, and the rest of the ludicrous claims and blood libels in your post are at about the same level of accuracy. At least you're consistent.

Tel Aviv is the de facto capital. That's where most countries put their embassies and the claim on Jerusalem is contested.

Are you a christian zionist?

Re: Google to buy Wiz for $32B

#456

Post by freeqaz »

dinobones wrote: post #433

This makes no sense. Assume 1,000 customers each generating $2m in ARR with contracts. That’s $2 billion. Assume generous 6x ARR valuation, that’s $12 billion. Where is this $20 billion premium coming from? How could the board approve this? How is this fair to shareholders? Heck, as a minor shareholder in GOOG, I don’t find this financially responsible at all. I can’t help but think sometimes these tech acquisitions…

Imagine you are a company, like Wiz, that is still growing fast.

Sure, your valuation could be based on revenue today. But why would you sell if you're "worth" $12bn right now, but you'll be "worth" 32bn in a few years? Why give up the control?

The only way for a company like Google to buy Wiz is to add a premium. Otherwise the company will just say "no".

This literally happened to Figma as well. And there is a history of this with companies like Instagram/WhatsApp.

In retrospect, was it stupid for Facebook to acquire Instagram/WhatsApp for large premiums?

Re: Google to buy Wiz for $32B

#457

Post by wasabi991011 »

wahnfrieden wrote: post #424
gnfargbl wrote: post #421

Earlier quoted context omitted.

Military service is compulsory in Israel, so being a former member of 8200 isn't exactly unusual. Given the choice between spending two or three years as deployed infantry, or writing code in an air-conditioned office, I suspect a few of us here would choose the latter.

[flagged]

Removing all context from this quote and not including a source is misleading.

I was surprised at the quote so I looked up your source[1] and it describes the ways Israelis avoid conscription by using exceptions/deferrals such as being Palestinian, being ultra-Orthodox, having physical or psychological conditions. Others just choose to go to military prison.

Sounds pretty mandatory to me, at least how the word is commonly used.

[1] https://truthout.org/articles/more-israelis-are-refusing-dep...

Re: Google to buy Wiz for $32B

#458

Post by StackRanker3000 »

otterley wrote: post #364
film42 wrote: post #323

Earlier quoted context omitted.

It's smart defense, great offense, and a good product behind it. Each eat a big chunk of that $100B target. I don't see Wiz as a 10 year company, I see it as a forever requirement for companies to manage all of their cloud resources (across all providers). It will be here as long as GCP/AWS are here. I expect a short path to ROI on this one.

Consider that AWS's entire operating income for 2024 was $40B. GCP is 1/5th the size. I admire your optimism, but I think it's unwarranted.

So why do you think Google is making this acquisition?

Re: Google to buy Wiz for $32B

#459

Post by xpe »

dinobones wrote: post #433

This makes no sense. Assume 1,000 customers each generating $2m in ARR with contracts. That’s $2 billion. Assume generous 6x ARR valuation, that’s $12 billion. Where is this $20 billion premium coming from? How could the board approve this? How is this fair to shareholders? Heck, as a minor shareholder in GOOG, I don’t find this financially responsible at all. I can’t help but think sometimes these tech acquisitions…

Did you have your conclusion in mind before running your back of the envelope calculation? Many people do this much of the time. That often results in motivated reasoning.

One way to reduce that tendency is to use multiple POVs of analysis. You could phrase it as a question instead: what assumptions would you need to change for the valuation to make sense?

Other questions: What factors are you not including? / What would it take for nepotism to survive scrutiny and how much nepotism would be tolerated?

My guess here is there are long-term strategic factors that the decision makers weighed heavily. I’d be very interested in understanding their world view, since they have much better internal visibility of both companies.

Re: Google to buy Wiz for $32B

#460

Post by tgma »

Taek wrote: post #453
dinobones wrote: post #433

This makes no sense. Assume 1,000 customers each generating $2m in ARR with contracts. That’s $2 billion. Assume generous 6x ARR valuation, that’s $12 billion. Where is this $20 billion premium coming from? How could the board approve this? How is this fair to shareholders? Heck, as a minor shareholder in GOOG, I don’t find this financially responsible at all. I can’t help but think sometimes these tech acquisitions…

How is 6x generous? Alphabet's P/E is 23. That means $2 billion rev implies $46b valuation (assuming high margins) These deals always have more than meets the eye. Google wouldn't acquire revenue at a fair market price just for revenue's sake - there's some reason they expect to get value beyond the revenue. That doesn't mean its nepotism. It could be that they think they can triple revenue per customer with some syn…

P/E is the earnings multiple, not revenue. Your assuming high margins is doing a lot of legwork here. Often untrue for growing startups.
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