Chat App Discord Ends Takeover Talks With Microsoft (bloomberg.com) 61
Microsoft and video-game chat company Discord have ended takeover talks after Discord rejected a $12 billion bid, Bloomberg reported Tuesday, citing a people familiar with the matter. From the report: Discord is now focused on a potential public listing in the long term, the people said, asking not to be identified because the matter is private. Several other companies also tried to buy Discord in recent weeks, the people said. The identity of these companies couldn't immediately be learned. San Francisco-based Discord is best known for its free service that lets gamers communicate by video, voice and text. People stuck at home during the pandemic have increasingly used its technology for study groups, dance classes, book clubs and other virtual gatherings.
really (Score:5, Interesting)
really?
they plan on making more than $12 billion "eventually"? after "going public"? a company that basically just "sells" a "free service"?
do they expect millions of people to pay $100 a year to have prettier emojis?
I honestly don't understand this.
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Re:really (Score:5, Insightful)
You can always start the same thing all over again
No you cannot. Or at least you cannot and be as profitable. All your base went with the thing you just sold. If you create the exact same thing, your base is established in the thing you just sold off. So unless you bring something new to the table, your base isn't coming to your new thing. Yahoo, Apple, Microsoft, and Google have all bought out small players and those small players moved on to something completely different or just was one and done with it altogether. Yahoo bought out Astrid, Microsoft bought out Wunderlist, and neither of those devs came back into productivity software again.
You don't come back into the thing you just sold, not unless you really have an urge to burn through all that money you just got. And then after you burn through it all, you end up with nothing because the person you sold to absolutely has the capital to crush you and every atom your little start-up is made of. No, once you sell, you move on to something different and don't look back. Looking back just is a wonderful way to lose all the money you just made.
As for the walking away from $12B. I think Discord knows what's going to happen with MS. Microsoft was just going to close the service down, the end. I mean they already have Teams and this seems like it was a getting rid of a competitor move rather than buying something of value move. I'm guessing Discord wasn't quite yet set on the idea of sunsetting, which would have come with a MS buy out. Now will they make $12B? Probably not. Sentimentality will do that to you, but it's their product, they do what they want with it as far as I'm concerned.
Re:really (Score:4, Informative)
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They are NOT currently profitable though
Well
Sentimentality will do that to you, but it's their product, they do what they want with it as far as I'm concerned.
I mean what do you want? Some people get protective. Some it's all about the money. I don't know, only people who do know the whys and why nots are the people involved in the talks, but I'm just pointing out to the parent of this thread, not every company is out to make sense and that's just how it be sometimes. Strange world we all live in.
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That is WSJ estimate. There is no reliable public data on how well Discord is doing, as company is private and doesn't publish financials.
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No, it is literally a single WSJ claim based on a single "(anonymous) person familiar with the company" written as a part of a larger story on personnel shuffling in Discord.
Source: https://www.wsj.com/articles/c... [wsj.com]
Notice how in an otherwise well sourced story, no source link is provided for the relevant claim. You can find this claim repeated near verbatim across multiple similar WSJ stories written by Sarah E. Needleman that all came out around the same time, for example:
https://www.wsj.com/articles/a... [wsj.com]
T
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When China troll has problems comprehending the difference between "post on social media" and "Wall Street Journal story".
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Quality of you China trolls has really declined lately. Step it up, you're so dull, it's much less fun to poke you on your stupidity.
Re: really (Score:1)
If anyone looked at D&B's modeled 2021 estimate for Discord Inc, you'd see a much lower sales amount.
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Discord stopped doing game sales something like a year ago I believe, when the entire thing failed.
Or are you talking about them renting server boosts?
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Yeah depends on what "same thing" means (Score:2)
You're absolutely right.
Of course, what the founders of Discord did was not "make a chat app". Any competent developer can do that in a couple weeks. What they did was build a $12 billion business.
When someone says "do the same thing again", the thing they can do again (and have done several times) is build a business, in a similar way. A chat app isn't anything special.
In fact the two founders have built several successful businesses. They can do that again, by applying the same business principles that
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Of course, with $12 billion they don't NEED to build another business. With $12 billion they could spend the rest of their lives doing whatever they want.
And with driven people like that, what they probably want to do is build a business. Perhaps they like the business they have built and don't want to simply flog it for the most money, regardless of how that will affect the business they have spent years building.
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No you cannot. Or at least you cannot and be as profitable. All your base went with the thing you just sold. If you create the exact same thing, your base is established in the thing you just sold off. So unless you bring something new to the table, your base isn't coming to your new thing.
Zoom.
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You can always start the same thing all over again.
Generally speaking, you will likely be subject to a non-compete clause for a number of years. So no, you probably can't. At least, not without being sued until you're living in a cardboard box.
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No, but even better: you can do something completely different. If you walk away with a billion dollars, the number of things you cannot do later are very small. Almost all fun things are available to you (owning a sports team is probably off the table, but part of one is not), and you can self-fund the start up of any project you want (excluding rocketry, some biotech, and probably quantum computing).
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Re:really (Score:4, Interesting)
It's ridiculous expensive but I don't think they're "making bank" off it. Someone else in this thread says their annual revenue is only $130 million and dwarfed by their annual expenses.
Server boost certainly exist and are expensive ($50/year/boost and you need at least 2 to do anything), but I rarely see them and the features they offer are only vaguely useful. About the only thing I do see are people with Discord Nitro Classic, which is the $50/year level. (There's another level called confusingly enough Discord Nitro, and that's $100/year.)
Their plans for making money appear to be more related to charging game developers for services that allow them to reach their players. The users/players themselves are basically the product.
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The users/players themselves are basically the product.
Duh. There should be an old saying about how if you're not paying for the service, you're not the customer, or something.
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I don't know what they're planning (but it won't stop me from guessing later in this reply), but from what I've heard from others in the gaming industry, the whole "Microsoft and Discord are in talks!" was based on - well - basically nothing. Discord has never commented on it (other than an April Fools joke), Microsoft has never commented on it, and the source was always unnamed "people familiar with the matter." It's entirely possible Microsoft was interested in Discord, but it's unclear if there were ever
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Zoom's market cap is $95 billion at the moment.
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It's worth noting that Discord already has a better low latency small group streaming implementation than Zoom. And that's pretty much the main reason why Zoom is valued at its current level.
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Except that, of course, discord just works without even requiring installing any software on your machine. Almost all features will literally work in your modern browser.
And main reason why it's so hugely popular is because I can use it like any social media app straight from my phone and its.... wireless connection.
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Zoom is used by everyone. It's become a genericized trademark. A verb, even.
Discord is just a chatroom for young people, particularly gamers but also anime and other young nerds (old nerds like me hang out on IRC).
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There are two factors at play:
First is the business model of Silicon Valley style "social media start-ups". Their goal is not to be profitable, but to reach as many people as possible as fast as possible. With this, you got for a maximum value IPO, where those that invested early cash out and make out like bandits. Those that bought into the IPO roll the dice. You may have bought next facebook. Or next nameless garbage tier company worth nothing in a year.
Second factor is that market is currently utterly aw
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So does twitch, and it is essentially a billion dollars business a year.
Discord has gained LOTS of user during the pandemic. I have essentially switch to discord to manage all projects involving students. It's great. Now how they are going to make money off this remains a question and whether the gain in user will remain over the long run is an other question. But at the moment they look pretty good.
And as far as we know, there is a second buyer around the corner.
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Ah twitch, the underdog company owned by a megacorp, Amazon.
Yes.
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Those 12 billion weren't cash, either. So it's really the difference between having a bunch of virtual "maybe" money far in the future and having a bunch of virtual "maybe" money right now.
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It is way better than Zoom, Google Meet, Skype, etc. Only some commercial educational offerings with dedicated classroom functionality get anywhere near.
There is still a lot of money in the remote working/education market. Will it be worth 12Bn? I do not know. But it will be worth something in the Bn range.
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really? they plan on making more than $12 billion "eventually"? after "going public"? a company that basically just "sells" a "free service"? do they expect millions of people to pay $100 a year to have prettier emojis?
I honestly don't understand this.
Remember when Microsoft bid $44 billion to buy Yahoo in 2008? Yahoo absolutely should have taken that deal. I suspect that this isn't much different. I'm not an industry expert, but I have serious doubts about whether Discord will ever be worth that much. After all, the service that they provide has been pretty well commoditized - is there really anything special about it other than their user base? It seems like Discord is easily replaceable as a service, and it likely will.
Ballsy (Score:3)
I'd imagine some of the people rejecting this would put over a billion in their pockets. There's a lot to be said for the "Tom, from MySpace" model of getting out with a lifetime of cash and not worrying about it anymore.
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Snapchat did something similar. Spiegel rejected $3B buyout offer and now is worth $10B.
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Can he sell it for $10B in cash though?
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Yes, and that was a stupid, stupid move. They should definitely have taken the offer.
READ THIS RESPONSE OVER MY OTHER ONE (Score:2)
Sorry, I accidentally clicked submit on my other response.
And that was a stupid, stupid move.
They immediately sold 5% of the company to continue growing (at only a $2 billion valuation) in their 2012 dilution, another 5% in their 2014 dilution, another couple rounds after that and in 2016 they sold another 10%. So guess that they lost25-33% of their value over those rounds (at least.)
They also spent 9 years of their life working at it.
Spiegel lost a significant chunk o
jerry yang, moonlighting as an advisor to discord (Score:1)
Sometimes the DO ring a bell at the top (Score:2)
There is a joke on Wall Street.
They don't ring a bell at the top.
In other words, you have to guess when the market has topped out and then sell before the masses.
Well, sometimes, they DO ring a bell. This is that bell, my friends. Now is not the time to be all-in long on the NASDAQ (or any other) exchange.
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I don't think the fed will be able to tighten any time soon. They will be unwilling to cause a market panic, and also, tightening would lead to higher interest rates and, over time, will increase the cost of financing the national debt (as of FY 2020, 520 billion in interest payments with 3.4 trillion in revenue...)
Good news (Score:2)
I think its wrong that Monopoly is made by just one company.
Good! (Score:1, Informative)
Good! F Microsoft! They already F'ed up Skype to the point where it's borderline useless garbage. I don't want them messing up my favorite chat tool!
Can't say I'm thrilled with Discord going public though because you KNOW that means a rush to monetize and that likely will mean either monthly fees, tons of advertising (or worse, BOTH).
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So you're happy with other people runining it as long as it's not microsoft. Gotcha.
Ugh. (Score:2)
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No (Score:2)
let's make it big! (Score:3)
Why let our first 100 employees retire early, and the next 1000 pay off their mortgage, when we can grind away for years and really make it big?
Google posting more fake news (Score:2)