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Microsoft Corporation was revealed to be in a discussion for its bid to purchase Discord, an instant messaging and digital distribution platform. It was said that the deal will cost the tech company over $10 billion if it completes the acquisition of the company. This information has been shared by sources who are familiar with the situation.
Search for possible buyers has commenced
In any case, Venture Beat reported that Discord has been exploring its sale and it has already reached out to potential purchasers. Microsoft is one of the leading candidates to acquire the firm, but it was clarified that there is no definite deal yet.
It was suggested that out of all those that expressed interest in buying Discord, Microsoft has already reached the final stage of the talks. However, the Washington-headquartered firm declined to comment on this matter.
As of December 2020, Discord was valued at about $7 billion. The company is most known as a platform where users set up groups and coordinate them for activities like virtual parties, gaming, and simple discussions.
On the other hand, Microsoft is looking to acquire social media platforms with numerous users to strengthen its gaming and entertainment business. It purchased LinkedIn for $26.6 billion in 2016, and the company is hoping to get its hand on Discord that will surely help in achieving its goal.
About Discord
As per The Wall Street Journal, Discord has more than 140 million users who log in every month. With this, the company was able to make $130 million in 2020.
The software is free to use for most of the users, so the company is only making money through its Nitro subscriptions. Users who subscribe can enjoy more advanced features when they use Discord, and this includes larger upload limits and higher resolution screen sharing.
Finally, Microsoft can gain more from the acquisition of Discord because the company’s profits last year nearly tripled, and this was only due to selling subscription access to exclusive perks for users. Since it has more functions, then it means it has the potential to earn more from the other things it can offer to the users.
Microsoft can do this through similar strategies used by the leading social media hangouts such as Twitter and Facebook. Microsoft can simply use ads to boost its earnings after acquiring Discord.
