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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.

Biden threatens new sanctions against Ethiopian officials over Tigray conflict

Photo: Al Drago/Getty Images

President Biden on Friday signed an executive order allowing the Treasury and State Departments to impose sanctions against Ethiopian officials "responsible for, or complicit in, prolonging the conflict" in the Tigray region.

Driving the news: Hundreds of thousands of people are facing famine conditions in Tigray, but less than 10 percent of the needed humanitarian supplies has reached the region over the last month "due to the obstruction of aid access" by the Ethiopian government, according to Biden administration officials.

Top general: Calls to China were "perfectly within the duties" of job

Gen. Mark Milley. Photo: Andrew Harrer/Bloomberg via Getty Images

Joint Chiefs Chairman Mark Milley told the Associated Press on Friday that calls with his Chinese counterpart during the final months of Donald Trump's presidency were "perfectly within the duties and responsibilities" of his job.

Why it matters: In his first public comments on the calls that have prompted critics to question whether the general went too far, Milley maintained that such conversations are "routine," per AP.