Image source: Slack.

Microsoft (MSFT 0.11%) is a different company under CEO Satya Nadella for the simple reason that the company knows how to say no. Under former CEO Steve Ballmer, the company was heavily faulted for recklessly spending on acquisitions, only to see these investments written down in subsequent years. The new Microsoft appears to be more disciplined in its approach to spending company cash.

According to a report from TechCrunch citing an unnamed source, Microsoft briefly considered buying the cloud-based communication tool Slack for $8 billion before both Nadella and former CEO Bill Gates rallied against the idea, with Gates pushing for the company to instead spend capital on improving its Skype product.

For Slack, this would have been an excellent exit strategy for current investors, as the company was valued at $2.8 billion post-money less than one year ago. Additionally, an acquisition would avoid an IPO exit.

More recently, public perception has become decidely more bearish for tech's unicorns after struggling post-IPO performances from former darlings Fitbit and GoPro. The new Microsoft appears to be more disciplined in how it allocates capital, and that's most likely a positive for investors.

A brief history of Microsoft's acquisitions
Ballmer's time at Microsoft has been characterized as a "lost decade," as many faulted the CEO for failing to grow market capitalization. I previously argued that this isn't an entirely fair characterization, because Ballmer grew revenue and earnings at a commendable clip during his reign. However, one area where Ballmer should be faulted was the company's acquisition strategy, which led to millions in shareholder destruction.

In 2007, Microsoft paid $6.3 billion for Internet-advertising company aQuantive to compete with Google in search. At that time, Microsoft paid a near-90% premium for the company. In 2012, after watching Google continue to dominate search, Microsoft took a $6.2 billion writedown on the purchase.

Former aQuantive staffers reportedly blamed Microsoft's "Windows-first" culture and focus on search rather than aQuantive's display-advertising niche for the failure. Whether the company initially overpaid for the company, or destroyed its value post-acquisition with a flawed strategy, is immaterial for investors.

But wait, there's more...
Not content with $6.2 billion in shareholder destruction, Ballmer announced Microsoft would buy Nokia's smartphone business in 2013 to compete with both Apple and -- you guessed it -- Google, as both had vertically integrated business models at the time. As an ominous warning, Google sold its Motorola Mobility division to Lenovo after quarters of operating losses before Microsoft completed the purchase for $7.9 billion.

After an unrelated $1 billion writedown for Microsoft's Surface RT tablets, Ballmer was replaced by current CEO Satya Nadella in early 2014. In June 2015, the company took an even larger $7.6 billion impairment charge on the Nokia purchase after watching the Lumia unsuccessfully attempt to grow market share. Nadella's new strategy is to focus less on smartphones, and more on making its software more mobile-friendly. Interestingly enough, Nadella has done a decent job with the failed Surface tablets, as well.

Questions about Skype's acquisition
Even purchases without large writedowns have drawn controversy for Microsoft. Its purchase of videoconferencing/VOIP provider Skype in 2011 raised eyebrows. Skype was purchased by online bidding site eBay for $3.1 billion in 2005. In 2009, eBay sold 65% of Skype to a group of investors led by Venture Capital firm Andreessen Horowitz, valuing the entire company at $2.75 billion -- less than the amount it paid. Two years later, Microsoft paid $8.5 billion for the company, providing this investment group with 200% returns.

With this history of acquisitions, one can't blame Microsoft for attempting to refine products it has in-house first. But don't cry for Slack. The service supposedly had eight-to-10 acquisition offers as of last year, and is growing users at a healthy clip.

Could this be the company that got away for Microsoft? Maybe. But if past is prologue, the best thing for both companies was for Microsoft to pass on the acquisition.