Why Microsoft Wants Discord

Didn't Oakley sunglasses try something similar when Luxottica first tried to buy them and then Luxottica managed to ruin them and ended up buying them much cheaper?

And hasn't Microsoft already done the same to a large number of startups?

Obviously, they have the opportunity to get even bigger and either IPO or get purchased for a higher price... but they also have a risk of losing market share (and value) to competitors... or being acquired by a larger company might give them the funding, marketing power, business alignment, etc. to accelerate their growth.

(Not talking specifically about Discord - I know almost nothing about their service.)

Then the bigger the company gets, the further removed you are from your original dream and when someone waves a big pile of money in your face, it's a very tempting offer

Also worth noting, many of these smaller companies plan on getting acquired. That is their cash-out. In particular the ones which accept VC money are under tremendous pressure to cash out in one of these deals.

I also would prefer companies stuck it out, but there are huge risks if you stick it out and massive payoffs you get from a buyout, it’s rarely in the founder’s best interest.

But it seems even today it's still possible to use Skype with old native accounts, along with Microsoft account and what I just discover... with Github accounts. So if they do purchase Discord it might be possible that in future this IM will get support for MS accounts (I wouldn't be surprised if also Github ones) and users will be also offered merge and login with MS account alone containing "old" Discord accounts data for MS definition of "convenience". After all Microsoft account it's their single sign-on feature.

If purchase will take place, I think the question is what they'll do with it: keeping Discord as exclusively game-oriented IM that will somehow be merged with their Xbox infrastructure or abandon Microsoft Teams/merge it with Discord and keep it as business/professional oriented communication platform. Discord might be left alone for a while but I think MS will eventually give it a special place somewhere under their umbrella of services.

Examples include

AIM

Skype

Slack

and now Discord

more of a problem is when one company is a big player in several horizontal markets, creating an opportunity to take over new markets with a mediocre offering.

when there's a will there's a way. the companies that want to grow that badly will find a way to evade such restictions like they do to taxes, they'll probably call it something like organisational structure optimization.

TBH, I think it might be good to put limits on company types i.e. what type of business a company can do at a certain scale; and very different rules for large vs small companies in general (and maybe private/low-majority-shareholder-count versus public corps) - that way a tech company can just go into another industry and dominate on the basis of better funding alone.

I'd also really like to see product based shares/corp-ownership; where ip, copyright etc for a product are held only by a co-op that issues shares/agreements with associated partners companies. That way instead of having a corp first, with its product to support it; you could have a product first, with a company to support it.

Optimistically, it would result in all applications being federated and there being a multitude of hosting platforms to choose from.

Or Microsoft would sell Teams server software to hosting companies with strict requirements like not allowing connections to competing products. Or just slightly alter the existing O365 reseller model..."We don't have 100 million users, we have 100 users (resellers) who each have sold 1 million licenses."

Lots of people cut their programmatic teeth building simple things that interact with these platforms. It would be nice for Microsoft if every teenager building a bot to play fart noises on discord does so on Azure™ building with Microsoft Visual Studio Code™. The fact that AWS has been the standard "go to" place for people to get cloud servers up and running has been nice for them.

Also, it creates opportunities for these "cool" companies to write technical blog posts for your stuff. I think Discord has helped Elixir rise in popularity - I'm sure Microsoft would like to see something like their "how Discord scaled to 5m concurrent users" for C# (or whatever stack they want to promote).

Now, I have no idea how big a deal this would be. I really doubt it's a $10b big deal. I agree that "the community" isn't a reliable factor. If anything, I think this purchase puts the community at risk. People like that Discord is a small company that needs to care about how good its servers are. If they suddenly are owned by a giant company that might care less, people might look around for alternatives.

App install ads on consoles or future mobile platforms.

Plus just more lucrative ads on Discord expanding (or including if they don't have) in stream video. MSFT already has a crappy ad network but they have a lot of addressable potential.

Maybe they have a larger streaming vision and this is a way to build streaming content, or console CTV media channels paying and assisting premium creators like YouTube. A lot of these streams end up on youtube already.

In addition to the above, two virtual conferences I’ve attended in the last year have used Discord as their interface for attendees and speakers & organisers. It’s versatile, has a decent permissions structure & supports audio/video sharing. (Although both conferences chose to use Zoom for the actual talks.)

People use slack because they liked it and convinced their managers.

MSFT has direct access to every single CTO/CIO in the world. They have a sales pipe into most of them along with a bunch of other products. 'Teams' is on paper, the Slack equivalent that rolls in along with the other products and will likely be preferred by Managers.

I believe that Discord has 1) more resonance with XBox than Teams, and 2) it gives MSFT access to a true, consumer, content oriented setting. Like FB, TikTok etc. which is a cultural access point they don't have.

This is just...buying a company.