Microsoft wants to take over the Discord chat program for ten billion dollars

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Ten billion dollars, for that you could almost buy a small DAX company like MTU Aero or half of Deutsche Bank.

But according to US media reports, the US software company Microsoft would prefer to invest this amount in a chat app for computer gamers.

It's barely six years old - but it already has over 250 million registered users.

We are talking about Discord, a provider of chat and voice communication services that is particularly popular with relatively young users.

According to a report in the New York Times, Microsoft is ready to invest about $ 10 billion in the takeover.

For comparison: Facebook bought WhatsApp for 19 billion dollars in 2014, but WhatsApp had almost five times as many active users at the time.

Amazon and Epic are also interested in buying

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The talks are still of a preliminary nature and no firm conclusion has been reached.

According to various media reports, Microsoft is not the only interested party, allegedly Amazon and the game provider Epic Games are also interested in a purchase.

Alternatively, Discord could also consider an IPO.

But talks with Microsoft are the furthest advanced - and the deal would bring funders the lowest risk deal given the generous valuation.

Investors in the start-up from the Mission District in San Francisco since 2016 include the Chinese internet company Tencent and various venture capital funds, all of which would now cash in.

It is questionable whether a possible deal would be examined by the antitrust authorities: The mega takeovers of the Internet giants are increasingly being criticized in both the USA and Europe.

Bills in the US for new antitrust rules could already take effect in the Discord case.

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But at least the competition in the field of short messages and audio conferencing has worked so far.

There are many Discord alternatives available from Facebook and smaller providers such as Zoom.

So a degree would have a good chance.

Xbox boss Phil Spencer is said to lead the talks for Microsoft.

That shows why Microsoft wants to buy the company: Discord is currently the most popular communication platform and chat community for computer gamers.

Thanks to the boom in online computer games, it was able to significantly gain users in the past pandemic year.

The company currently lists over 100 million active users who are active in over 13 million chat and group call rooms, talking for over four billion minutes a day.

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Discord was started as a program with which players in multiplayer games can coordinate with each other at lightning speed, for example to discuss moves, to warn of opponents or to act together.

Above all, Microsoft wants to reach these player communities.

In 2014 the group bought the company behind the computer game "Minecraft" for 2.5 billion dollars, since then the game has grown to become the most popular title in the world with over 200 million games sold and over 125 million active players per year.

Many of these players already use Discord for their joint "online activities".

Microsoft's Xbox console could also be expanded with Discord functions and would thus be ahead of the competitor Sony with the Playstation.

But the Discord entry threshold is relatively high: New users can initially be confused by the variety of chat rooms, audio channels and short messages.

The program works best on a big screen, not on a smartphone, and is clearly aimed at a very online-savvy target group.

In the early days after 2015, Discord's chat rooms were divided into games.

For every game there is at least one so-called "server", as Discord calls chat groups that users first have to join.

Within the server, users can then open chats or voice channels for ongoing rounds of games such as “Call of Duty”, “Minecraft”, “Fortnite” or “Player Unknown Battlegrounds”.

Direct links to these groups can be distributed in the respective games via chat; teams of players can use them to coordinate quickly and easily.

Before Discord, the players mostly used programs like Teamspeak or Skype.

But then Microsoft took over Skype and didn't develop it much further.

Discord, on the other hand, works quickly, without delay, and is clearly aimed at online gamers.

Anyone who wants can set up their own group free of charge - this is how conspiratorial communities quickly form.

Discord now has 13.5 million active servers, each of which represents its own community, the number of members of which can range from a dozen to 500,000.

What began with games has long since expanded: If you are looking, you can find a Discord server with a community of like-minded people for pretty much every niche topic, every hobby.

The most popular include servers for web development, cooking, Japanese anime, and talent search television shows, each with more than 100,000 members.

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Room for hate speech

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Discord has what Facebook is now missing - it's fast, raw, unfiltered, close to the pulse of time.

But - and this is perhaps the greatest risk for Microsoft - that's exactly why Discord also has servers for right-wing extremist hate groups, for pornography and fetish lovers, even for drug trafficking or bullying from a perpetrator's perspective.

Users can post pictures and videos in their groups without deleting nude pictures, porn or violence.

Discord was increasingly exposed to public criticism in the January days after the storming of the US Capitol because supporters of right-wing extremist militia groups and the QAnon movement in the USA had previously planned their acts of violence in Washington anonymously via Discord.

Watchdog has to wait for invitation

Of course, Discord has been aware of the problem for a long time, is now also moderating posts and has blocked the servers of various hate groups since 2018.

The company is also increasingly relying on "Carl", an automatic moderation bot that is supposed to intervene in the event of requests for violence or bullying.

But the bot only gets into a server if the users invite it there.

The company usually only intervenes when users complain - so as long as hate criminals stay among themselves, they don't have to fear moderation.

Until January, Discord was a little under the radar in this regard, also in Germany: In this country, for example, the company had not named a delivery agent for complaints under the Network Enforcement Act at least until 2020.

But now law enforcement agencies in the US are increasingly looking at the goings-on in the Discord communities.

International NGOs secure chat logs, publish them and thus show that moderation has so far been largely ineffective.

This puts Discord under increasing pressure.

If a large corporation like Microsoft were to take over Discord, the communities there would suddenly be in the limelight - and could quickly switch to a new, less prominent provider.

The takeover could end Discord's hit streak abruptly.

Nevertheless, with the acquisition, Microsoft could finally try to operate a functioning social network itself - one that, unlike the last acquisition, LinkedIn, also works outside of the business environment.

It depends heavily on whether Microsoft's managers manage to keep their hands off the management of the platform and let them continue as before.

With the latest major acquisition, the Github programming platform, Microsoft has managed to do this so far.

But, unlike Discord, Github has no hidden Nazi problem either.