Messaging platform Discord Inc. concluded the acquisition talks with Microsoft Inc. (NASDAQ: MSFT) as it intends to remain independent and pursue a potential initial public offering, The Wall Street Journal reported on Tuesday.
What happened: Microsoft has held advanced talks to buy the Discord start-up, with an offer of about 10 billion dollars. The tech giant has been looking for big ticket purchases to reach more consumers and has bought Nuance Communications Inc. (NASDAQ: NUAN) for $ 16 billion last week.
Microsoft was close to buying the operations of the Chinese social networking site TikTok in the United States, Canada, Australia and New Zealand last year, through a deal that could have brought in between $ 20 billion and $ 30 billion.
Launched in 2015, San Francisco-based Discord has held talks with at least three other companies, the WSJ report said. Starting social networks runs a free online platform to allow text, audio and video conversations. It is primarily popular with players.
Read also: Why is Microsoft interested in discord?
Why does it matter: Microsoft’s agreement with Discord would have helped it expand its presence on social networks beyond the gaming company LinkedIn Corp and Xbox. Discord users rely on the platform to communicate with each other while playing games and find that it offers better sound and features than the competition, including Xbox and Skype owned by Microsoft.
The startup claims that it doubled its monthly user base last year, to about 140 million, as daily life moved online amid the COVID-19 pandemic. The still unprofitable company generated revenue of $ 130 million in 2020, up from nearly $ 45 million in 2019.
Several startups with links to the video game industry have recently gone public, including developers Roblox Corp (NYSE: RBLX) and Playtika Holding Corp. (NASDAQ: PLTK), game hardware manufacturer Corsair Gaming Inc. (NASDAQ: CRSR) and provider of game creation tools Unity Software Inc. (NYSE: U).
Price action: Microsoft shares closed 0.19% lower on Tuesday at $ 258.26.
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