Microsoft Nixes Slack Acquisition

Microsoft reportedly saved $8 billion by not buying messaging app

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Microsoft was in talks to acquire the email-killing messaging app, Slack, but decided to forego the buy, according to various tech sources.

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Late last week, rumors abounded that Microsoft was set to purchase Slack for $8 billion. Microsoft VP of applications and services, Qi Lu, was the executing pushing for the acquisition according to TechCrunch.

However, both Bill Gates, and Microsoft CEO, Satya Nadella pushed back on the deal.

Long-time Microsoft reporter Mary Jo Foley, writing for ZDNet, gave her analysis of why Redmond backed out of the possible buy:

In some ways, Slack seems like it could be a good fit into the new Microsoft’s product line up. Slack is focused on productivity and communications. It is cross-platform. It’s all about teams. And it is big with younger users, especially those in the Valley.

But I can see why Microsoft might have opted to take a pass on Slack, especially at its supposed current asking price.

Slack is building out its collaboration platform to include voice and video chat. Microsoft already has an app for that: Skype/Skype for Business. Microsoft paid $8.5 billion in 2011 to snag Skype, even though its Lync product already did much of what Skype itself provided at that time.

The consensus in the tech industry is that Microsoft is committed to building out Skype into not only a VoIP (Voice-over-IP) solution but as a comprehensive digital communications platform.

As Foley indicates, Microsoft’s Skype for Business has replaced much of the functionality offered in its enterprise messaging solution, Lync.  In April of last year, Microsoft announced that Lync was officially changing into Skype for Business.

Slack currently has 2.3 million daily active users, 675,000 of them paying. To date, it has had eight to 10 acquisition offers, according to TechCrunch since its launch in August 2013.



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