Google reportedly bids to acquire Fitbit

As Apple continues to progress in the wearables market, Google parent Alphabet is rumoured to be looking at buying Fitbit.

The goss comes courtesy of Reuters, which has been hanging out with people who reckon they have inside knowledge of the matter. The story had almost nothing else to say on the matter, other than it not being a done deal yet and somewhat redundantly stressing that it’s sources are anonymous because they don’t want to be sacked for leaking stuff.

Stories like this often come from official, but clandestine channels with one or both of the companies in question. One reason for the acquiring company to do such a things is known as a trial balloon, in which it leaks a rumour to see how the market reacts. In this case Fitbits shares were up 27% at time of writing, but that’s probably just in anticipation of the typical premium paid for an acquisition. Perhaps more telling is the fact that Alphabet’s chares are up 2-3% on the rumour.

Google tends to buy device companies to contribute to the associated ecosystem around them, rather than a strategic aim to develop that line of business as a profit centre in its own right. The Android wearables market seems to have stalled, while Apple makes steady progress, so maybe Google had decided it’s time to intervene. Then again this could be a false alarm, in which case anyone who flogged their Fitbit stock today will be feeling pretty smug.