Google buy Fitbit just to push advertising

No need to strap a fitness tracker on Fitbit investors to see how their hearts race at the possibility of a buyer for the company. Reports of interest from Alphabet sent shares up more than 30 per cent on Monday. A wearable tech company trying to ward off the existential threat of smartphones is not exactly a moonshot project for Alphabet, parent company of search engine Google… Fitbit makes most of its money selling devices but has had mixed success. Its shares trade far below the $20 they listed at in 2015. If a deal does emerge, it may end up being more about data than devices. Fitbit devices track location and biometrics — both useful bits of information… Third-quarter earnings this week showed that Alphabet’s advertising business sales grew 17 per cent on the previous year to almost $34 billion… “Other bets” such as self-driving car company Waymo are not yet pulling their weight… It is up to advertising, which accounts for more than four-fifths of group revenue, to take the strain. At $1.5 billion, Fitbit has a market value not too far from the price Google paid to buy YouTube in 2006. Fitbit is unlikely to match the video-sharing site’s growth but, like YouTube, it would give Alphabet yet another platform for its advertising business. 

Lex.

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