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Is this Possible Acquisition a Smart Move for Microsoft?

By Jose Najarro - Mar 24, 2021 at 11:26AM

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The tech mammoth is rumored to be buying Discord.

Microsoft (MSFT 0.65%) is rumored to be in talks of acquiring Discord for $10 billion. Below I'll share my thoughts on what investors should question about this acquisition.

Discord is a free voice, video, and text chat app and is used intensely by the gaming and Reddit community. Think about a less professional version of Slack or Teams.

My main concern about this acquisition is understanding how Microsoft would use this platform to grow its business. Will Microsoft use it as a gaming asset with Xbox content, or tailor it to improve their Microsoft Teams platform? 

If it is a gaming play, some investors might be hesitant. Microsoft has had a bumpy road with some of their gaming social plays. For example, MIXER, a live streaming platform, was recently moved over to Facebook Gaming. 

If this is a business tool move, it is cheaper than buying Slack, which is currently valued at over $20 billion. Many reviews online say the main difference between Slack and Discord is the integrations they offer; Slack is light years ahead with integrations for business, but this is something Microsoft can change quickly.

Microsoft already has Teams to compete with Slack, so most investors might be looking at this acquisition as a gaming play. I believe that this can be a mixture of both. It can keep Discord as a sole gaming play and use the inner portions to improve the Teams platforms.

As an Microsoft investor and someone who's bullish in the esport/gaming market, I am excited to see where this leads.

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