
Slack Said to Draw Interest from Amazon - coloneltcb
https://www.bloomberg.com/news/articles/2017-06-15/messaging-startup-slack-said-to-draw-interest-from-amazon-com
======
chollida1
Serious question..... but also more me fleshing out my thoughts on messaging
apps....

What is the point in buying a messaging app?

\- instant messenger

\- ICQ

\- Skype

\- Yammer

\- WhatsApp

They all seem to be popular for a short time and then fad away.

What does owing one of these get a company?

The case against owning them is that they all go out of favour and you only
have a small window, say up to 5 years, where your platform is dominate before
everyone moves onto another solution.

At one point the theory was it got people to use a companies proprietary
login, when companies thought there was value in having people use their
login.

At this point, if I said Slack would be a shell of its former self in 5 - 10
years would anyone put up an argument , if so what's the argument that this
time its different.

I'm a happy slack user, but i"ll move to a new platform tomorrow if a better
one comes along, there is almost no network effect or lock with these apps so
switching has almost zero cost.

Plugins might provide a slight lockin but time has shown again and again the
same plugins will move to the next popular messaging app, which seems to
negate any benefit.

~~~
sinatra
We all asked the same question about Facebook. All social networks before
Facebook had faded away. But, Facebook didn't. Potential Slack buyers think
that Slack is also here to stay in a similar manner. EDIT: I'm not saying
Slack is Facebook.

One reason why I think Slack may survive longer than ICQ, Skype etc is how
well integrated it is with all other services. For a tool to replace Slack, it
should also provide the same level of seamless integration with GitHub, Google
Docs, and a hundred other services. That's much harder to do than just
building a messaging app.

~~~
zanny
Facebook isn't just about the people on it at this instant, it is about the
accumulated history people build up on it.

Exporting your Facebook profile is a labyrinthian effort few would consider.

Switching chat providers is as simple as getting everyone to use the new thing
and going from there, there is little to no baggage to bring with you.

~~~
sinatra
I don't think that's true. Switching to another messaging service means you
lose all past messages. It also means you need to integrate all other services
(like Github, Google Doc, Travis, and many others) to this new messaging
service. That is a lot of friction!

~~~
rkda
Chat services usually have an import service. At least for their more famous
competitors. Doesn't Slack allow you to export your message history?

------
maitrik
Really believe that Microsoft should have bought Slack. It makes perfect sense
for them and aligns with their vision to be the productivity center of
everyone's workflow.

Microsoft doesnt understand this space at all. Look what they are doing to
Skype by making it more like Snapchat when their main use case is business
related. Teams also feels so unfinished.

~~~
taurath
Skypes main use case isn't business related, and you can tell because they
still use freaking Lync on macs

~~~
vertex-four
Skype for Business is Lync, and has little to do with Skype proper.

------
sillysaurus3
Selling Slack seems like a mistake. It's so ubiquitous. I'd be interested in
buying stock in Slack if they IPO.

Snapchat was in a similar situation, and four or so years ago when they turned
down Zuck's ~$5B offer everyone was saying what a silly mistake it was not to
sell. How could Snapchat possibly make money? And think of all the
disheartened employees whose shares would've been worth something.

Turns out there's a market for ubiquitous software. Slack seems similar.

Another datapoint: Look how well the acquisition of Oculus turned out. Palmer
now has money, which would've come eventually. He no longer controls Oculus,
and hence can't impact the world. And in a twist of fate, Palmer has attracted
public annoyance due to some political decisions, so he went from favorite
underdog to just another wealthy person.

For ambitious people, this can sometimes be a worse fate than not being rich.
Ideas require opportunity and timing, and opportunities like Oculus, Snapchat,
and Slack are rare.

$9B is nice. But are you sure you wouldn't rather affect the world?

~~~
Grue3
Except Slack doesn't have any new ideas behind it. It's just another chat app.
And just like other popular chat apps of yesteryear, it's a fad that will
pass.

~~~
noway421
IRC was just a chat app, yet even though it didn't age nicely, was still
seeing massive usage for professional communication up until lately. Is it
only because of legacy? Hardly, new blood was pouring in constantly, the only
hit it took was skype.

Slack is simply disrupting this area by offering product which is up to date
and doesn't need bouncer running (+ hundreds of other useful nice to have
features).

------
dkural
Amazon's been a prudent steward of its cash and shareholder value. I'd be
really surprised if it spent this sum over Slack & encourage Bezos to go get
his head checked. Messaging platforms come and go. Many better ways to spend
$9B for Amazon.

~~~
pavel_lishin
They might be less interested in the app itself, and more interested in the
giant corpus of conversation stored therein.

~~~
wonder_bread
Which brings the point, who would ever sign on to use Slack/continue to use
Slack when Bezos & Co. could be scouring through your sensitive company
conversations?

~~~
praneshp
Is it very different from running all your sensitive company code on Bezos &
Co servers?

~~~
rhino369
Do the AWS Master Service Agreements really not preclude Amazon from searching
through your data for their own purposes?

~~~
hueving
Isn't the only entity that could conclusively determine if the agreement has
been violated the very one who would violate it?

------
stock_toaster
I would think Discord was a better fit for Amazon.

1\. Great fit with twitch.

2\. Seems like it could be "forked internally" and reskinned to compete with
slack in the business space too.

~~~
unabst
Discord is the better app at this point. Even for business use. But Slack from
an acquisition POV must be different. They have revenue, traction, and that
all important paying subscriber base. It's like everyone has always said.
Slack is just a chat app. It's not about the app, but rather, what they
achieved with it.

I love discord so much part of me wants Amazon to buy Slack just so it would
kill it (or MS or Verizon or anyone who tends to not know what to do with
things).

~~~
iand675
Having not really used Discord, what about it is better to you?

~~~
unabst
_Faster_. Discord is lighter and faster.

 _Simpler_. I don't need comments and threads and snippets and posts at the
expense of simple communications. These features are also inconsistent and
incompatible across devices.

 _Search /Cost_. Search doesn't search contents of snippets which was a
gotcha. And with a 10000 message limit, anyone using it for free reaches a
point where search breaks. I was deleting messages for a while because at the
end of the day all the 50/mo would have gotten us is unbroken search. It's
like 99% of the product is free and they ask to pay 50/mo for the last 1%.

 _Web Hooks_. Integrating anything is as simple as a single line cUrl command.
So for business use, if you already have a server doing a bunch of stuff with
various APIs, adding notifications to discord is a one liner.

Also Discord has a more intuitive server list on the side bar. With slack you
have to register with every team and "switch". In Discord it's just another
tab.

A business on Slack is one that 1) can't see a superior chat program when they
see one, 2) are willing to pay for an inferior product, and 3) can't look past
the "gamer" origins of a platform.

But to Slack's credit, they built a business out of just chat, which is
miraculous. And though I've arrived at Discord, they deserve all the credit
and respect in the world for achieving what they have achieved through a mere
chat subscription service. And I'm sure their philosophy and business
direction is what got them to where they are, so standing up and challenging
exactly that would admittedly be naive on my part. However I still do not
believe any of the points that I have made are incorrect either, which just
tells you more about this industry (chat industry?).

They just need a "Discord for Business". They would kill.

------
alexwilde
"Of the so-called big-five tech companies in the US, Amazon is the only one
without a messaging platform." [https://chime.aws/](https://chime.aws/)

~~~
jasonlotito
Chime is for video. Slack is for text.

~~~
losteric
Chime is for both, it's just not very good at text.

~~~
illumin8
This is not true. We use Chime for text every day. It doesn't have all the 3rd
party integrations that Slack does, but it give you the same basic
functionality.

Disclaimer: Work for AWS.

~~~
losteric
I use Chime in CDO ;)

Chime is definitely better than Lync, but I stand by my statement that it's
not _very good_ at text. It's missing basic UI features like threading or
merged comments, profile pictures/icons, not to mention more advanced
integrations.

I love using it for meetings... but text functionality is still lagging behind
Slack, or even Mattermost (also used within Amzn)

------
vesak
As somebody who happily advocates Matrix[1], I'd be ecstatic if Slack would be
bought by some giant and thus slowly made obsolete :)

[1] [http://matrix.org](http://matrix.org)

~~~
lgas
You're not a very good advocate. You didn't even give a single reason someone
should look into Matrix.

~~~
vesak
Does reasoning ever work in marketing, though?

~~~
lgas
I'd love to say it's the only kind that's effective on me, but obviously
that's not true. I do believe it's the most effective on me though. If nothing
else it's the only kind I intentionally engage with on a regular basis.

------
LAMike
Starting off at a new company this past week, and realize a lot of commerce
happens on Slack. Whether it's deciding what monitor to order, the best shows
to watch on TV or what live events are happening that weekend. Amazon could
see this as a way to capture some value generated there.

Also, an easy way to get companies signed up w/ Amazon Prime!

~~~
brd
This is an interesting take on the motivation. Amazon has shown that they're
interested in building their own private labels in certain verticals. That
trend coupled with the talk about "social shopping" and I can start to buy
into the idea that this deal could possibly originate from somewhere other
than AWS.

------
tdburn
One article yesterday suggested that the Amazon non compete lawsuit agaimay
their former AWS employee might indicate that they're planning on getting into
the business productivity market. With this news that might have credibility

~~~
ceejayoz
They're already in that market to some extent.

[https://aws.amazon.com/workdocs/](https://aws.amazon.com/workdocs/)
[https://aws.amazon.com/workspaces/](https://aws.amazon.com/workspaces/)

~~~
mrep
Throw chime in there to which is really good:
[https://chime.aws/](https://chime.aws/)

------
tzakrajs
Too late to buy, Slack is such old news now and their market is super
saturated. This could have been a decent decision several years ago, but not
now.

~~~
josefresco
[https://trends.google.com/trends/explore?q=slack](https://trends.google.com/trends/explore?q=slack)

Although the search data would indicate Slack is still super hot - I tend to
agree (anecdotally) that the market is saturated, first movers have already
... moved, and most likely growth will be slow.

~~~
ShardPhoenix
[https://trends.google.com/trends/explore?q=slack,discord](https://trends.google.com/trends/explore?q=slack,discord)

So far of course Slack is still much more popular among business users, but
I've anecdotally noticed a big surge in Discord usage among consumers (on
Reddit especially).

------
holydude
I hope they do not buy it but I am afraid they will. I am somehow sick of
these companies that do not generate enough profit to sustain themselves and
have to be bought by oligopolies like Amazon.

~~~
accountyaccount
Is Slack actually unsustainable? They take in more than $150m in revenue a
year at this point.

~~~
holydude
Well this is what I do not know. I am not an investor nor a shareholder but I
suspect a single niche product is not that appealing.

How long will it take for Facebook/Google/Microsoft to get a good enough
product and release it for "free" ? I am not sure but I think it will be hard
for slack to diversify its portfolio.

Would Twitch survive against Google's YouTube gaming if it would not get
acquired by Amazon ?

~~~
rrdharan
Both Google and Microsoft have already done the "release it for free" part,
but it's unclear if / when the market will think the products are "good
enough":

[https://products.office.com/en-us/microsoft-teams/group-
chat...](https://products.office.com/en-us/microsoft-teams/group-chat-
software)

[https://blog.google/products/g-suite/meet-the-new-
enterprise...](https://blog.google/products/g-suite/meet-the-new-enterprise-
focused-hangouts/)

------
criddell
I was the person that first brought Slack into our company. I worked hard to
get people to start using it and now it's used a great deal.

So now, I find myself using email more again. Slack seems to bring with it
expectations of instant replies and lately I find myself preferring the more
asynchronous nature of email. I do like that the Slack archive is generally
open and searchable to all, but the interruptions suck. If the Slack client
was silent unless it had focus, I think it would work better for me.

~~~
sjg007
Yeah, I hate hangouts/gchat for that reason as it is inside gmail. So
annoying. Same with Facebook messenger. If I want you to get in touch with me
you can send me an SMS/iMessage.

~~~
derimagia
Just because the chat sends instantly doesn't mean you have to reply
instantly. I think that's a poor reason to stay away from a service like Slack

------
QuinnyPig
Fascinating. Amazon generally only does acquisitions of small companies for
core technologies or teams; they've historically been great champions of the
"not invented here" philosophy.

This would be a radical departure from that pattern.

~~~
askafriend
What's also interesting is that they have a product that is somewhat of a
Slack competitor:

[https://aws.amazon.com/blogs/aws/amazon-chime-unified-
commun...](https://aws.amazon.com/blogs/aws/amazon-chime-unified-
communications-service/)

It was launched only 4 months ago. I wonder how it's doing today and how
important Amazon thinks this space is for them and their platform. It's AWS
branded too which is a bit odd.

~~~
stephenboyd
Amazon teams and products often compete against each other. It's like how they
have both Prime Now and AmazonFresh as grocery delivery services.

~~~
r00fus
PrimeNow doesn't do groceries does it? How is this cross-competition?

~~~
mcpherrinm
They certainly do groceries in my Zip code. Fresh produce, cheese, dairy,
eggs, etc.

------
Steeeve
The power of slack isn't in their technology, it's in their marketing. There
have been a thousand IRC clones. Few have gained any traction at all. I
suspect under new management it will falter, but at the same time I also think
that it's a terrible idea not to sell if the opportunity arises.

~~~
romanovcode
> The power of slack isn't in their technology, it's in their marketing.

Exactly, because their technology is complete crap.

------
ejcx
There isn't a lot here to read in to. I worked at a very small company that
was going to be bought by amazon. We were "left at the alter" by amazon.

I would be very surprised to see a slack deal go through, knowing what I know
about our acquisition process, but they are a little different than we were.
If AMazon buys them they have better be sure they can quickly integrate them,
unlike twitch that's unique enough to hang around.

~~~
r00fus
There are so many Amazon purchases that just "hang around" for better or for
worse: Audible, Goodreads, IMDB... the list is large.

I like they don't necessarily have to vertically integrate all their
acquisitions.

~~~
asplake
In some ways, Goodreads suffers for its integration. List a book that's on
Leanpub and not Amazon and you're left with an Amazon button that's worse than
useless.

------
Apocryphon
Is it true that Slack can't scale to companies with thousands of people? I've
heard that Uber uses HipChat instead for that reason.

~~~
hello_newman
I don't think that's true. I've worked w/ GA and they use slack and they have
thousands of employees.

------
nathan_f77
I think it would make much more sense for Apple to acquire Slack. Both
companies are known for their emphasis on good design and UX.

Slack and Amazon appear to have very difficult cultures, so that would be a
very interesting acquisition. If I was an engineer at Slack, I would really,
really hope that the company could continue to operate independently, as a
subsidiary. I would not be happy if I was forced to work for Amazon for the
next x months before I could cash out and leave.

~~~
droopyEyelids
Slack was known for that, but they compromised very quickly with threaded
conversations and the mess that is "slack enterprise grid"

------
perseusprime11
Microsoft will counter with $12b. Makes sense to sit with Microsoft. The new
culture at Microsoft will allow for the caring and feeding of Slack.

~~~
anon_8247582
As someone who pays for Slack and uses it throughout the working day, I hope
nobody acquires them, especially Microsoft.

I don't have anything against Microsoft per se, but in my opinion, they ruined
Skype.

~~~
perseusprime11
I mean they are clearly looking to sell and Stewart is trying to create a
bidding war to get the most money out of this deal. How many companies can
afford to create new enterprise contracts with Amazon for enterprise software?
They are either Google customers or Microsoft customers for employee
productivity software.

------
usaphp
Could they legally buy slack and then use all the conversational data to teach
their Alexa AI on how to talk more like humans?

~~~
Cthulhu_
Slack would be the wrong dataset, it's all text after all which has its own
colloquialisms and whatnot.

------
chinathrow
I wonder if the price/valuation will be so high if they have a large and
growing _paying_ customer base or if they assume to monetize the customer data
in the long term via other means (e.g. selling aggregate data for ad
purposes).

------
gigatexal
9 billion to purchase the service to push ads for AWS. Hmm.

------
intopieces
It would be an interesting acquisition given Amazon recently launched its own
AWS-hosted competitor to Slack, called Chime.

------
rrdharan
No one expects the Amazon slackquisition.

------
msoad
Observation: The only successful messaging apps that are still around are the
ones who sold to big co.

------
BhavdeepSethi
I'm assuming the idea would be to onboard existing Slack clients to Amazon
Chime.

~~~
blazespin
Most likely the opposite. Slack will keep its own brand like twitch or
audible.

------
jgalt212
How did they mistake Slack for Whole Foods?

------
adreamingsoul
This is inaccurate: "Of the so-called big-five tech companies in the US,
Amazon is the only one without a messaging platform. Apple has iMessage,
Facebook has Messenger, Microsoft has Outlook and Teams, and Google has
Hangouts."

Amazon has Chime.

------
roflchoppa
Should just buy AIM.

------
sitkack
I'd only do an acquire. Slack is on the ropes.

------
wcummings
How much revenue does slack generate?

~~~
flipp3r
"The company reportedly has about 5 million daily active users, with 1.5
million of those paying for the service." *
[https://slack.com/pricing](https://slack.com/pricing)

At least 10 million a month, I assume?

Edit: "Slack has 5 million daily active users -- 1.5 million of whom pay to
use the service -- and had $150 million in annual recurring revenue as of Jan.
31." from
[https://www.bloomberg.com/news/articles/2017-06-15/messaging...](https://www.bloomberg.com/news/articles/2017-06-15/messaging-
startup-slack-said-to-draw-interest-from-amazon-com)

~~~
dsr_
Interesting that they derive $100 per paid user per month. I The Enterprise
level pricing must be 6-10x the top team level.

~~~
michaelt
Pretty sure that's $100 per paid user per _year_ \- which fits with the fact
they have $7/mo and $12/mo tiers.

------
rsp1984
Whatsapp: 500 million users for $18b.

Slack: ~10 million users for $9b?

This doesn't make much sense to me. What's the rationale behind this?

~~~
nathan_f77
The business models are completely different. Whatsapp users were paying
something like $2 per year, while businesses are paying $8 per user per month.

~~~
dexterdog
I think most whatsapp users were paying $0. I know I was.

------
cylinder
... why?

