U.S. Markets closed
  • S&P 500

    -55.41 (-1.31%)
  • Dow 30

    -533.37 (-1.58%)
  • Nasdaq

    -130.97 (-0.92%)
  • Russell 2000

    -49.71 (-2.17%)
  • Crude Oil

    +0.46 (+0.65%)
  • Gold

    -10.90 (-0.61%)
  • Silver

    -0.01 (-0.04%)

    -0.0045 (-0.3797%)
  • 10-Yr Bond

    -0.0610 (-4.04%)
  • Vix

    +2.95 (+16.62%)

    -0.0115 (-0.8272%)

    -0.0810 (-0.0735%)

    -1,921.31 (-5.09%)
  • CMC Crypto 200

    -51.42 (-5.47%)
  • FTSE 100

    -135.96 (-1.90%)
  • Nikkei 225

    -54.25 (-0.19%)

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


(Microsoft CEO Satya Nadella.AP)

In March, reports emerged that Microsoft was mulling over an $8 billion bid to snatch up the red-hot, $3.8 billion work chat app Slack — but 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 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 reports 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 organize 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 that it claims were obtained from 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 Butterfield
Slack CEO Stewart Butterfield

(Slack CEO Stewart Butterfield.Slack)

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.

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

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'll be a real fight.

A spokesperson for Microsoft says that the company is "always building and testing new solutions to help people collaborate and get more done," but declined to offer specific comment on Skype Teams.

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

More From Business Insider