Rumor: Microsoft Might Have Spent Up to $8B to Buy Slack

Slack is a fairly formidable force—2.3 million daily active users and just around 675,000 or paid seats, as the company calls its subscriber base. These users help Slack reach $64 million in annual recurring revenue, according to an infographic the company released last month. And, in total, people are spending a lot of time on Slack: 1.5 billion monthly messages, 320 million minutes of "active slack usage" per week, and more than 280 apps in the Slack directory that companies and groups can use to spice up their chat channels.

All this activity in the corporate communications world—in-house communications, that is—allegedly attracted Microsoft's attention. According to a new report from TechCrunch, the company was mulling a potential bid for Slack that could have possibly reached as high as $8 billion. That's quite a bit more than the current backchannel talk that puts Slack's valuation at just around $3.5–4 billion dollars, based on the company's current solicitations for a new $150–300 million financing round. (Its last funding round, back in April of 2015, put the company at a valuation of $2.8 billion.)

So why isn't Slack fully integrated into a Microsoft property right now? According to reports, an internal campaign for the acquisition couldn't convince CEO Satya Nadella or co-founder Bill Gates—with Gates himself even suggesting that the company just roll some of Slack's features into Skype. (We're not sure how that might work, given that Skype has a very specific purpose as a voice- and text-messaging application, which is a bit different than the Slack's focus on chat rooms, channels, automation, and integration with existing services.)

While it wouldn't be difficult for Microsoft to build a direct competitor to Slack, the company would then have to put in a lot of work marketing it to businesses—those, in some cases, who are already happy with Slack. Buying Slack outright would give Microsoft both a tool and a dedicated community for it, which is why the acquisition model, to some, likely looked compelling.

Interestingly, Microsoft has already built a means for integrating Skype into Slack, which it unveiled as a preview this past January. And Slack, most recently, has started to branch out into voice and video. While the two seemed destined to circle each other, it remains to be seen just how much more Microsoft will actually try to "Slack up" Skype—or whether it'll try and compete with Slack in one of its other business services (like Yammer).