[fm]: Microsoft No Longer Keen on Buying Slack

Slack is currently valued at $2.8 billion after a $160 million funding round in April last year. 

"If you cant beat them, you buy them" has been the mantra for Microsoft Corporation’s (NASDAQ:MSFT) top executives for quite some time now. According to a report published on Friday by TechCrunch, Microsoft had been thinking about acquiring messaging startup Slack after the latter announced new voice and video features.

Slack’s new services puts it in direct competition with Microsoft’s video chatting service Skype that has more or less dominated the segment. Recent trends indicate that Slack is emerging as a strong force in the market. The company currently caters to 2.3 million daily active users, including 675,000 paid users. This makes it a potential threat for companies looking to stake a claim in the enterprise collaboration service market.

Keeping this in view it really comes as a no brainer why large tech companies would be interested. According to TechCrunch around eight to 10 companies have shown interest in acquiring Slack. Microsoft itself had bid $8 billion. This represents a huge premium over Slack’s latest $2.8 billion valuation that came after a $160 million funding round in April last year.

Microsoft’s executive vice president of applications and services Qi Lu was reportedly the major force pushing for Slack’s acquisition. However his efforts were subsequently pushed aside by co-Founder Bill Gates and CEO Satya Nadella. Mr. Gates and Nadella were of the opinion that instead of buying Slack to curtail competition the company should instead ramp up features and services on its Skype platform.

The CEO and Co-Founder’s direction does makes sense considering that Microsoft already has the arsenal to develop its own servic similar to Slack. Microsoft has bought and formed strategic partnerships with various companies in the enterprise segment. These companies include SharePoint, Yammer, Lync.

By:  Ather Ahmed. 
Editing: Khurram Baig. 

Review: Emerging Market Formulations & Research Unit, Flagship Records.

For The #FacebookTeam