Buying Discord
Microsoft is in talks with Discord, whose app allows people to communicate through video games and can also be used in business, education, tourism, etc.
Microsoft (MSFT) is in talks to acquire Discord, a major community messaging and video calling platform, which could cost the tech giant more than $10 billion, Bloomberg reported Monday, citing unnamed sources.
Microsoft shares, up 71.8% in the past 12 months and 7.55% in the last quarter, were up 2.45% on Monday.
Discord has reportedly approached potential buyers, which include Microsoft, and was previously in talks with Epic Games and Amazon (AMZN), but no final deal has yet been struck.
According to another source, Discord may opt for a listing instead of a sale, which would also raise funds for growth.
The Discord app was created to communicate with friends while playing online, but has now gone beyond a tool exclusively for gamers and is used in business, education, tourism, etc. Discord users today communicate via voice calls, video calls, text messages, multimedia and files in private chats or within communities.
Launched in 2015, the Discord app has grown to 800,000 downloads per day during the pandemic, while its user base peaked at over 140 million monthly active users last year, about double the number of monthly active users in 2019. Discord's growth has also coincided with the rise in popularity of online multiplayer games such as Epic Games' Fortnite.
Last December, the media reported that Discord's valuation after the latest funding round was around $7 billion.
Last year, Microsoft sought to buy the TikTok app and was in talks to acquire Pinterest (PINS), but the deals fell through.
Discord is a valuable asset for Microsoft's Xbox gaming division, while the software company already owns business communication platforms such as Skype for Business and Teams.
According to media reports, it was Xbox head Phil Spencer who negotiated with Discord. Microsoft is looking to expand its Game Pass subscription game service and teaming up with Discord would give a strong competitive advantage and could help boost subscriptions.
