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article imageAmazon interested in buying Slack for up to $9 billion

By James Walker     Jun 15, 2017 in Technology
Amazon is reportedly in talks to purchase messaging start-up Slack in a deal worth up to $9 billion. If it goes ahead, the acquisition would be Amazon's largest ever and give it a strong foothold into enterprise tech. Slack is said to be wary.
The existence of discussions between the two companies was revealed in a report from Bloomberg today. Slack has made waves in the enterprise communication market, ousting its established competitors with its appealing back-to-basics product. Focused on simple text messaging but also featuring robust integration options with third-party services, Slack has successfully forced the former market leaders onto the defensive.
The company has reportedly been approached by Amazon with details of an acquisition agreement. At this point, talks are said to be in the early stages, according to people "with knowledge of the situation" who spoke to Bloomberg. It's understood that Slack will be valued at "at least" $9 billion if it is sold.
The purchase would be hugely significant for Amazon, a company seeking to grow beyond its online retailer roots. The company has made some strong inroads into consumer tech with the likes of its Echo smart speaker and Kindle e-readers. It doesn’t have any presence in the enterprise market though, something that the purchase of Slack could resolve overnight.
Amazon's the last of the major tech companies to lack its own messaging platform, now seemingly a requirement to be successful in the sector. By snapping up a popular and well-respected existing product, the company could affirm its role in the technology industry, progressing its evolution out of retail.
Slack currently has around 5 million daily users with roughly 1.5 million paying subscribers. It's often found in modern small and medium-sized businesses but it pitches its product towards enterprises of all sizes. According to Bloomberg, the company is currently making around $150 million in recurring revenue each year.
If Slack decides to proceed with the sale, it's not known whether it will immediately agree to Amazon's proposal or court offers from other potential buyers first. Bloomberg's report states Amazon is one of several tech firms interested in purchasing the app. It's unclear how far advanced the discussions are with any of the other members of the group.
Bloomberg also noted that Microsoft was reported to be interested in purchasing Slack last year, adding the product to its extensive line-up of cloud productivity tools. The company ended up building its own rival from scratch instead, publicly launching Microsoft Teams earlier this year. It's not known whether the talks were shut down by Slack or abandoned by Microsoft when it decided to build Teams.
There's no guarantee that Slack will accept Amazon's offer. It hasn't previously signalled that it's eager to be acquired. The vast amount of money on the table may help to sway the decision but the company has previously demonstrated it's capable of thriving on its own, without outside input.
As a start-up app that's enjoyed success driven solely by its well-reviewed product, Slack may decide to simply walk away from the discussions. Neither Amazon or Slack have said anything publicly today.
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