Message platform Discord Inc. has the acquisition talks with Microsoft Inc. (NASDAQ: MSFT) because it plans to remain independent and pursue a possible IPO, The Wall Street Journal reported Tuesday.
What happened: Microsoft was in advanced talks to buy the fast-growing gaming communications startup Discord, with a bid of approximately $ 10 billion. The tech giant was looking for major purchases to reach and acquire more consumers Nuance Communications Inc. (NASDAQ: NUAN) last week for $ 16 billion.
Microsoft got close to buying Chinese social networking site TikTok for video sharing in the United States, Canada, Australia and New Zealand last year in a deal that could have raised $ 20 to $ 30 billion.
Founded in 2015, Discord was in talks with at least three other companies, the WSJ report said. The social networking startup has a free online platform to enable conversations through text, audio, and video. It is especially popular with gamers.
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Why it matters: Microsoft’s deal with Discord would have helped it expand its social media presence beyond LinkedIn Corp and Xbox gaming operations. Discord users rely on the platform to communicate with each other while playing games and find that it offers better audio and features than competition, including Microsoft’s Xbox and Skype.
The startup claims to have doubled its monthly user base to about 140 million last year as daily life went online during the COVID-19 pandemic. The still unprofitable business brought in $ 130 million in revenue in 2020, compared to nearly $ 45 million in 2019.
Several startups with ties to the video game industry have recently gone public, including developers Roblox Corp (NYSE: RBLX) and Playtika Holding Corp (NASDAQ: PLTK), game hardware maker From Corsair Gaming Inc. (NASDAQ: CRSR) and provider of game creation tools Unity Software Inc. (NYSE: U).
Price promotion: Microsoft stock closed 0.19% lower on Tuesday at $ 258.26.
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