Microsoft was mulling an $8 billion bid for super-hot work chat app Slack — but opposition from founder Bill Gates and current CEO Satya Nadella killed the deal before an offer could even be made, reports TechCrunch’s Jon Russell.
According to that report, Microsoft Executive VP Qi Lu, the guy in charge of R&D for Bing, Office, and Skype, was the key figure in lobbying for the company to make a big bid.
But Gates pushed back, arguing that the cash could be better used investing in making its popular Skype app more business-friendly with new features.
For its part, Slack is reportedly after a new $150 million round of funding that would value the startup at $4 billion. Before that, Slack’s last known valuation in the Spring of 2015 was $2.8 billion. In the May of 2015, Slack CEO Stewart Butterfield said that his company had already turned down “8 to 10″ acquisition offers.
It’s no mystery why Microsoft might be interested in Slack.
In fact, given the fact that Microsoft has bought up plenty of other popular business software startups — like the email app Acompli and the calendar app Sunrise — and turned them into pieces of Microsoft Office, Slack often comes up in conversations as a potential acquisition target for the company.
Slack is often called one of the fastest growing business apps in history. Since its official launch just two years ago, Slack has added 2.3 million monthly active users and says it’s on track to generate roughly $64 million in annual revenue.
And users, generally speaking, love it. While Microsoft’s own social apps like Yammer have struggled to find real purchase in the enterprise as collaboration tools, Slack has won over fans and acolytes just by virtue of being fast, well-designed, and easy to use.
But so long as Gates and Nadella are resistant to this kind of deal, it seems that Slack and Skype are fated to be competitors. More recently, with new voice and video calling features in the beta stage, Slack is starting to bleed over more heavily into Skype’s territory.
Microsoft declined to comment.
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