Why Microsoft Is Not Buying Discord

Why Microsoft Is Not Buying Discord

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Discord has walked away from acquisition talks with Microsoft, ending several weeks of negotiations, and will focus on its growth and a potential IPO.

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Why Microsoft Is Not Buying Discord

Discord has reportedly backed away from buyout negotiations with Microsoft. It’s thought the popular communication app will instead focus on its own progress with a potential IPO in the future. Reports suggest Microsoft was negotiating a $10+ billion acquisition of Discord for several weeks prior to the walkout.

Discord enjoyed a major boost last year because of the pandemic-borne lockdowns. Gamers had another reason to stay indoors and connect with friends through the app and it saw an influx of new users the same way that communication apps like Zoom and Google Meet did. Since then, Discord has pivoted its focus towards a more general audience rather than just gamers. The app’s popularity apparently caught the eye of at least three companies, including Epic Games and Amazon, but it was Microsoft that appeared to be close to striking a deal.

However, The Wall Street Journal (WSJ) reports that Discord has now walked away from the talks, citing people familiar with the matter as saying that Discord is performing well and, as such, would rather stay independent at the current time. Other sources, including TechCrunch, say they have corroborated the WSJ report with their own sources. The possibility of talks being reopened at some point has apparently not been ruled out but, in the meantime, the company will focus on its own product and has brought in a finance chief to ready it for the potential IPO.

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What Does This Mean For Discord & Microsoft?

Discord might have dodged a bullet by staying independent. An acquisition always has the potential to derail a smaller company’s initial plans for itself in favor of those of the bigger company. Though a $10 billion deal is certainly nothing to shrug off, Discord likely has bigger plans on the horizon. The app has recently developed its own Stage Channels take on Clubhouse, for example. which adds more functionality for its growing user base. In short, Discord is doing relatively well for itself without Microsoft and has plenty of growth potential.

On the other hand, Discord’s walkout is another blow to Microsoft’s recent acquisition pushes. Late last year, it was in the running to purchase TikTok, which was under orders from the Trump administration to find a US buyer or face its operations being shuttered in the country, but ultimately lost out to Oracle before TikTok was reprieved altogether. Microsoft has made a number of acquisitions since then but will continue to look around as it seeks to expand its interests in consumer-facing software and services.

Link Source : https://screenrant.com/microsoft-discord-acquisition-sale-halted-why-explained/

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