How did Microsoft sell so much

Why Microsoft wants to buy Discord: What makes the chat service so interesting?

Discord got big as a voice chat for video gamers, but has become a virtual hangout for friends during the pandemic. Now Microsoft is considering taking over the platform for $ 10 billion.

As it became known at the end of March, Microsoft is negotiating a purchase with the Discord communications platform. The exclusive talks could be concluded as early as April, writes "The Wall Street Journal". The purchase price should be $ 10 billion or more.

It's not the first time in the recent past that Microsoft has been said to be interested in a social network. In autumn 2020, as part of the turmoil, the tech group negotiated a possible ban on Tiktok in America by taking over the American business of the video platform. Takeover talks are also said to have recently been held with Pinterest. In both cases the negotiations fizzled out.

Looking for a community

So it doesn't seem to be a coincidence that Microsoft is now trying again with Discord. In contrast to its American competitors Google (Youtube), Facebook (Facebook, Instagram, Whatsapp) or Amazon (Twitch), Microsoft lacks access to a larger public community on the consumer side.

And this is what the group really wants: In an interview with Bloomberg, Microsoft's CEO Satya Nadella said: “The next ten years will revolve around creating content as much as it will be about the community around it. So it's not just about creation. " And he added: “If in the last ten years it has been about consumption - we buy more, we surf more, we watch more series - then behind all of these aspects there is creation. But I think the phenomenon will be more democratized. "

Nadella sees future growth for herself where people create content and communicate their ideas. With the communication software Microsoft Teams and its office offerings, the group already has a platform that - especially since the beginning of the pandemic - has been indispensable for many in their daily work. And with Microsoft Mesh, the tech company recently presented its vision of how we can work together and communicate in virtual spaces in the future. The acquisitions of the career network Linkedin (2016) and Github (2018), a platform for managing open source software on which developers can network, also fit into this strategy. Microsoft wants to open up these communities for its work and cloud products and to bind the creators - i.e. the users who create content - to itself.

Discord is a virtual meeting place

While these tools and networks put the focus on the business and work world, the acquisition of Discord would broaden the horizons. Headquartered in San Francisco, the company was founded in 2015 by Jason Citron and Stan Vishnevskiy. The goal was to create a simple and reliable form of exchange for gamers.

Whoever opens the app can open so-called servers and thus virtual rooms or join existing ones, which in turn are divided into any number of text or voice channels. Video telephony or screen sharing are also possible. A server can be characterized as a room that is operated, for example, by a group of friends. Anyone who is online can see the others present. You jump into a voice chat and can interact immediately without having to exchange any links beforehand. This low-threshold type of communication is ideal for video games, which often require coordination among the participants.

The narrow focus on gaming has now moved into the background. Discord sees itself today as a place where like-minded people can meet and exchange ideas. During the pandemic in particular, the service was increasingly used to watch films together or to stay in contact with friends.

Youtube, Instagram or Twitch influencers also use Discord to stay in touch with their community. Via the platform, the streamers can point out new content or live streams, their fans can discuss this or provide them with feedback and network with one another. Discord has also been used increasingly in the education sector since the beginning of the corona pandemic. School classes can be organized in different servers, and lessons or homework help can be coordinated via the different channels. And when a group work is due, you can meet in a language channel to exchange ideas. Microsoft itself is already an important provider in the school sector with its office and cloud offerings.

Discord claims to have over 100 million monthly active users. A rather small number if you compare it with the other large social networks. For comparison: Tiktok and Pinterest, in which Microsoft also expressed interest, have 689 and 442 million active users per month, respectively.

Discord is small compared to other networks

Number of active users per month, in millions

Video games as a common denominator

The tech group from Redmond also has an important mainstay in the gaming sector. Should the purchase be successful, Discord could move closer together with Microsoft's Xbox services and, for example, simplify communication between players on cell phones, consoles and computers. The fact that Microsoft would like to increase the attractiveness of its video game range was demonstrated by the company taking over the game developer Bethesda for 7.5 billion dollars in autumn 2020. Here, Microsoft measures itself against the game console provider Playstation, which has hitherto been more interested in interesting, exclusively for his platform developed games could shine.

If there is a purchase - and this is approved by the regulatory authorities - it depends on the implementation and integration of Discords into the Microsoft universe whether the takeover is a success. The tech company has not always had a lucky hand here; think of the Skype telephone service, for example. Microsoft should be careful not to scare away Discord users by unnecessarily imposing other Microsoft products on them. With Linkedin, among other things, the tech group has shown that there is another way.