Reports say Discord is selling. Microsoft can't let this one slip away. - The Entrepreneurial Way with A.I.


Monday, March 22, 2021

Reports say Discord is selling. Microsoft can't let this one slip away.


A new report says Discord is looking to sell for more than $10 billion dollars. Is Microsoft in the bidding?

Microsoft has a long and storied history with messaging apps. Whether it's nostalgic memories of MSN Messenger, or more recent efforts with Microsoft Teams, communication is practically foundational to every Microsoft vertical. Microsoft has also had a long and storied history of, well, failure in this area. Despite buying up Skype, the relevancy of Skype as a platform has deteriorated in recent years in favor of speedier competitors, like WhatsApp and Telegram, or more-connected social networks like Facebook Messenger.

Skype has still found its footing as a back-end service for products like Microsoft Teams and Xbox Live, both of which boast tens of millions of monthly active users. Still, there are big, gaping holes in Microsoft's ability to engage consumers within its own communication platforms, especially when it comes to building communities.

A new report from VentureBeat suggests that gaming-oriented messaging platform Discord is looking to sell for upwards of $10 billion dollars. One has to assume that Microsoft is in the running to be among those to acquire the messaging platform, given that it aligns almost perfectly with its plans for the future of gaming. It could also boost Microsoft's business aspirations, given that it is already far more powerful, user-friendly, and capable than Microsoft Teams, which is arguably only popular because it's bundled with Office 365.

Here's why I think Microsoft should certainly look to place itself in the bidding war for Discord, if it's not already at the fore.

Microsoft's messaging services are bad

I hate to say it, but Skype, Microsoft Teams, and Xbox Live messaging are all pretty awful at doing their job in general. Skype remains among the more reliable services for voice and video comms, and Xbox Live party chats generally do the job for group voice in gaming, but they've all fallen so far behind competing services due to lack of innovation.

Microsoft is a lumbering corporate giant, and often fails to meet the pace of innovation of smaller, more nimble teams.

Microsoft is a lumbering corporate giant, and often fails to meet the pace of innovation smaller, more nimble teams can accomplish. Few others represent this as succinctly as Discord, which not only destroys Skype and Xbox Live at texting, mobile quality, and usability, but arguably is even better than Microsoft Teams as an environment for professional use. Discord has a wealth of mature services, tools, and bots that can turn basic Discord servers into productivity powerhouses with only a few simple tweaks.

I remember long before even working in the industry, I was scratching my head over Microsoft's decision to shutter MSN Messenger in favor of Skype. MSN was faster than Skype and had a more intuitive interface. Frankly, it still does.

I'm not quite sure why, but it's absurd to me that, in 2021, Skype and Xbox Live messaging services lag behind the competition in speed. It just doesn't feel good to send texts over Skype-based services, watching the app struggle to open even on the world's most powerful PCs and phones, while Telegram and WhatsApp, and crucially, Discord, all open at a mere instant. If after years of failed attempts to rebrand and rebuild Skype, Microsoft is unable to improve even the most basic aspects of the service, there must be something fundamentally wrong with it. What else could it be? It's time to cut loose and move on.

Discord would solve all of Microsoft's social shortcomings

Microsoft has already been working pretty closely with Discord in recent years, and we've seen evidence that Microsoft is looking at even deeper integration between Xbox messaging and Discord in the near future. This could be a hint that Microsoft is indeed in the bidding to acquire the service, which is synonymous across the board with gaming communities everywhere.

Microsoft essentially has a choice to build up its own competing services or buy Discord outright.

Microsoft has attempted to emulate Discord's features in some ways. Microsoft's own "Xbox Clubs" feature started fairly promisingly, and we even saw designs that would've seen Xbox Clubs become even more "Discord-like," in previous years. Those updates never materialized, however, as Discord's popularity continues to gain pace.

I wrote an article in the past about why Microsoft can't ignore the rise of Discord. It was always apparent to me that Discord would eventually join a larger tech company. It was merely a question of "who," and "when."

Xbox Live and Discord enjoy some limited forms of integration, which could get deeper in the coming months.

In that article, I wrote that Microsoft essentially had a choice to build up its own competing services or buy Discord outright. Arguably, the former hasn't happened. Xbox Live and Xbox Clubs haven't had meaningful upgrades in what feels like forever, and lag behind Discord and other instant-messaging services across PCs, and crucially, mobile phones, where Microsoft aims to deliver the majority of its growth for Xbox Game Pass in the near future.

Microsoft wholly missed the boat with streaming, failing to catch up to Amazon's Twitch with Mixer. Allowing Discord to go over to Amazon or another competitor could potentially end badly for Microsoft, particularly if, for example, Amazon sought to integrate Discord with Twitch and its home-grown PC game streaming service Amazon Luna.

"Social" is Microsoft's big blind spot

Older Discord web pages asked users to "Ditch Skype." It doesn't need to do that anymore, since users have already ditched Skype.

Microsoft's attempt to buy TikTok last summer should serve as an indicator that Microsoft knows the importance of social media. In some ways, social media is the glue that many of its services simply lack. Discord isn't necessarily full-blown social media in the same vein as YouTube or Twitter, but it is crucially social in a way that it builds communities, and re-engages users passionate about a whole range of topics and subjects. It's also faster, and more intuitive than Microsoft Teams, arguably making it more productive.

Microsoft's home-grown social platforms have fallen too far behind their competitors to ever catch up at this point. Whoever lands Discord will gain a big advantage over Microsoft's entire portfolio of services, if Microsoft is forced to continue using the dinosaurian Skype as its primary mode of comms delivery. This is one deal Microsoft can't afford to let slip away.

via March 22, 2021 at 06:24PM by Jez Corden, Khareem Sudlow,