Bill Gates talked Microsoft out of trying to buy $3.8 billion Slack -- so now Microsoft is trying to kill it

Photo by Chip Somodevilla/Getty Images

Back in March, reports emerged that Microsoft was mulling an $8 billion bid to snatch up red-hot $3.8 billion work chat app Slack — but no less than Microsoft cofounder Bill Gates put the kibosh on that before an offer could be made.

Gates’ argument was that Microsoft would be better served taking Skype, which it had bought for $8.5 billion in 2011, and using it as the launchpad for a Slack competitor.

Now, it looks like Microsoft took Gates’ feedback to heart: Microsoft-focused blog MSPoweruser is reporting that the tech titan is currently testing a new tool called Skype Teams, and it looks and sounds a lot like Slack, with at least one key improvement.

Much like Slack, Skype Teams offers “channels,” which are different chat rooms for groups like sales, marketing, or product. A key difference is “Threaded Conversations,” MSPoweruser reports, which helps organise conversations by making it look more like a Facebook comment thread.

Otherwise, Skype Teams and Slack look to offer a similar vibe, including the ability to make voice calls straight from the chat window. MSPoweruser has what appear to be Skype Teams screenshots, which they claim were obtained from internal Microsoft employees.

Eventually, MSPoweruser reports, Skype Teams will make its way to the Office 365 suite as part of the monthly subscription for businesses, as well as potentially being available as a standalone product.

Slack CEO Stewart ButterfieldSlackSlack CEO Stewart Butterfield

It’s a logical move for Microsoft, as Slack makes tons of headway in the lucrative business software space. Plus, Microsoft is always looking for new ways to convince businesses to upgrade to Office 365, which has the potential to make a lot more money per customer for the company.

Plus, while Slack has found a niche in startups and midsize companies, it’s struggled to make progress in the much-sought-after large enterprise market. Companies like Uber actually ended up abandoning Slack, going back to chief competitor Atlassian HipChat, apparently because it didn’t offer the security and compliance features necessary.

So while Slack has won a lot of love in Silicon Valley, Microsoft’s enterprise experience and expertise could make it a serious contender in this market. But with billions on the line, it will be a real fight.

NOW WATCH: A guy Skyped his parents while jumping out of a plane

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.