This Week in Startups Emergency Pod! Microsoft in talks to buy Discord for $10B+; breaking down their thesis, Discord’s business & more | E1190
Mar 26, 2021
Microsoft is in talks to acquire Discord for over $10 billion, igniting discussions on the strategic implications of the deal. The podcast delves into Discord's evolution as a key communication platform, particularly in gaming. Experts analyze how this acquisition could reshape the tech landscape and enhance Microsoft's gaming strategy. Comparing this potential buy to other successful acquisitions, the conversation highlights challenges and opportunities in managing vibrant online communities while projecting future impacts on user engagement.
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From Games to Chat
- Jason Citron, like Slack's founder, pivoted from failing game ventures to chat supremacy.
- Citron's OpenFeint sold for $100 million, while Butterfield's Glitch led to Slack's $30 billion Salesforce acquisition.
Microsoft's Calculated Gamble
- Microsoft's $10 billion Discord acquisition, at 75x revenue, is double Slack's multiple.
- Microsoft likely has a strategic thesis to boost Discord beyond organic growth, justifying the price.
Discord's Strategic Fit
- Microsoft likely aims to integrate Discord with Xbox and Minecraft, targeting the consumer market.
- This strategy seeks to establish a community foothold, unlike their search engine Bing.