Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Sarah Grillo/Axios

Salesforce's likely acquisition of workplace messaging service Slack — not yet a done deal but widely anticipated to be announced Tuesday afternoon — represents a big gamble for everyone involved.

For Slack, challenged by competition from Microsoft, the bet is that a deeper-pocketed owner like Salesforce, with wide experience selling into large companies, will help the bottom line.

For Salesforce, the hope is that adding a hot, widely recognizable brand will give its business-service portfolio an edge.

For all concerned, the wager is that making the right corporate combination can work some transformational magic on the united businesses and make 2+2 equal 5.

That's a bet tech companies keep making — even though most of the time, they lose.

  • Occasionally, deals like Facebook's 2012 purchase of Instagram, Google's 2006 YouTube buy, or its 2007 acquisition of DoubleClick, turn out to be brilliant long plays that fundamentally expand a company's opportunities.
  • For every deal like these, there are many more that prove only moderately successful — like, say, Microsoft's 2016 purchase of LinkedIn — or downright disastrous.

The most common big-tech acquisitions are a lose-lose game, too often played by pairs of declining companies where one side has too much money and the other too little.

  • After spending more than $7 billion on Nokia in 2014, Microsoft had to write down most of the expense, and it had largely exited the phone business within 2 years.
  • Rupert Murdoch's News Corp bought MySpace for $585 million in 2005, and sold it for $35 million in 2011.
  • In 2000 AOL acquired Time Warner in a $182 billion "deal of the century" that went south in the dotcom bust and hobbled both companies for the remainder of their lives.

Yes, but: Salesforce and Slack don't fit that description, and neither seems to be acting out of desperation.

  • Salesforce pioneered the software-as-a-service industry, but it hasn't cracked the top tier of Big Tech valuation, and its recent growth has been goosed by purchases of services widely used by business people. In the past Salesforce has made runs at Twitter and LinkedIn, and Slack represents a similar bid to help it reach a broader market.
  • Slack's road to popularity started with early-enthusiast developers and snowballed with the pandemic-driven shift to remote work. Even so, its meteoric rise has slowed since it went public, and it faces new pressures to grow faster and turn a profit since it went public last year.

Between the lines: Along with Zoom, Slack looked to be one of the tech companies most likely to benefit from the era of social distancing.

  • But Microsoft's success with offering Slack-like communications via its Teams product has cut into the firm's growth, analysts say.
  • Big Tech critic Scott Galloway describes Microsoft as a "Death Star" that's squashing rebel startups like Slack.

The bottom line: If Slack does sell to Salesforce, it's a sign that even the pandemic's "winners" aren't doing as well as might be expected — and that winning against Big Tech remains a hard bet.

Go deeper

Jan 11, 2021 - Technology

Scoop: Facebook freezing political spending after Capitol attack

Photo: Valera Golovniov/SOPA Images/LightRocket via Getty Images

Facebook is halting political spending for at least the first quarter of 2021 following last week's deadly attack on the Capitol.

Why it matters: Tech companies have been de-platforming President Donald Trump and his supporters at a rapid pace since the attacks, and freezing political giving may be the next step tech companies take to show they're seriously rethinking their approach to Washington.

Tech digs in for long domestic terror fight

Illustration: Sarah Grillo/Axios

With domestic extremist networks scrambling to regroup online, experts fear the next attack could come from a radicalized individual — much harder than coordinated mass events for law enforcement and platforms to detect or deter.

The big picture: Companies like Facebook and Twitter stepped up enforcement and their conversations with law enforcement ahead of Inauguration Day. But they'll be tested as the threat rises that impatient lone-wolf attackers will lash out.

The pandemic could be worsening childhood obesity

Illustration: Aïda Amer/Axios

The 10-month long school closures and the coronavirus pandemic are expected to have a big impact on childhood obesity rates.

Why it matters: About one in five children are obese in the U.S. — an all-time high — with worsening obesity rates across income and racial and ethnic groups, data from the National Health and Nutrition Examination Survey show.