Source: Microsoft EVP Qi Lu pushed for deal to acquire Slack for up to $8B, but Bill Gates and Satya Nadella rejected plan, favoring adding features to Skype
Source: Microsoft mulled an $8 billion bid for Slack, will focus on Skype instead — Mar 4, 2016, 8:37 amMar 4, 2016, 3:39 pm
Context & Ripple Effects
In early 2016, Microsoft stood at a fork in workplace communication: EVP Qi Lu pushed to buy Slack for up to $8B, but Bill Gates and Satya Nadella chose to build on Skype instead. The bet on in-house development surfaced months later as Skype Teams, a Slack-style product with channels, threaded messages, and video calls.
The aftermath split both paths. Microsoft's refocusing of Skype for the corporate market alienated long-time consumer users even as Teams scaled inside enterprises, while Slack stayed independent — raising at a $5B valuation amid interest from Amazon, Microsoft, Google, and Salesforce — before Salesforce moved to acquire it outright.
First-order effects
- Slack remains independent rather than becoming a Microsoft business unit, keeping the enterprise chat market contested between a bought platform and a built one.
- Qi Lu's acquisition push loses to Gates and Nadella's build-vs-buy call, committing Microsoft's collaboration roadmap to Skype-derived engineering.
Second-order effects
- Microsoft's decision to compete rather than acquire forces it into direct feature parity — channels, threads, DMs, video — against a rival that already owned the category's mindshare.
- Slack's independence keeps it in play for other suitors, drawing Amazon's acquisition interest at a $9B+ valuation and eventually Salesforce's talks to buy the company — outcomes unavailable had Microsoft closed the deal.
Third-order effects
- The episode becomes a case study in build-versus-buy at platform scale: rejecting an $8B purchase either seeds a category-defining product or cedes ground, and the pattern pushes acquirers toward earlier, larger checks when a rival's wedge is visible.
- Workplace chat consolidates into suites — Microsoft bundling Teams with its productivity stack, Salesforce folding Slack into its CRM platform — squeezing standalone communication tools toward acquisition or niche survival.
The trend: Enterprise collaboration is consolidating around suite vendors who either buy their way in or clone the leader, with Slack's fate — pursued by Microsoft, Amazon, Google, and Salesforce in turn — marking the end of standalone chat as a durable independent category.