Discord CEO on reported Microsoft bid: ‘We did receive a lot of offers.’

It’s been reported that a $10 billion bid made by Microsoft for gaming platform Discord fell apart. Discord CEO and co-founder Jason Citron can’t talk about it — he’s under non-disclosure agreements — but he did tell CNBC on Tuesday that there was more than a single offer for his internet chat start-up, which is turning into a much bigger communications phenomen for voice, video and text.

“We did receive a lot of offers,” Citron said. “Our business is doing really well and we believe we are positioned to build a next-generation communications service.”

Citron and his Discord co-founder Stanislav Vishnevskiy started the business as a platform for gamers, like Citron himself, frustrated by internet communications technology that he says wasn’t keeping up with the pace of change. Many used services like Microsoft’s Skype to communicate and six years ago, the company was focused on creating a way for people who played video games to hang out and talk to each other in a better way.

But a lot has changed.

“We’ve seen people take our service and begin using it in all these new ways,” Citron said of the company, which ranked No. 3 on the 2021 CNBC Disruptor 50 list.

Users are talking about TV shows on Discord, and many other communities of interest, from photography enthusiasts to people focused on learning a foreign language, are on the platform.

That isn’t going to slow, Citron says, even if the pandemic ends and people return to more open, active lives.

“Last year was quite an outlier for many technology companies and … all of humanity,” Citron said, and he added that resulted in a doubling of its user base and tripling of revenue. But he says the longer-term growth trend of people spending more time online will continue. “At the end of the day, school day, work day … people will still want to spend quality time with friends and communities to study, play video games, or talk about ‘The Bachelor.’”

“We see tremendous opportunity to grow our business model,” he added.

The San Francisco-based company claims about 150 million active users per month and does not make money from advertising. Discord sells subscriptions to a premium service that allows customized profiles and high-resolution images and videos at tiers that charge $4.99 or $9.99 per month, or $99.99 per year.

The Discord CEO thinks the future will be one in which it continues to win by creating a better user interface for the equivalent of physical rooms on the internet, not just messaging technology. That room could be an auditorium, library, dorm, cafe or restaurant, and in the future, that space will be created, and experienced, virtually — bringing voice, video and text together in a way that creates new “spaces” and leads to different behaviors from users depending in the space they are in.

Discord calls its latest Stage channels, and it is not the only company chasing new techniques for social media connection. Twitter has its Spaces platform and Clubhouse, ranked No. 33 on this year’s CNBC Disruptor 50 list, is also creating a new kind of audio app experience and growing quickly. Facebook also is readying its live audio product.

Citron says many Discord users today experience it in smaller groups of friends, say six to 10 people, but the bigger communities around topics of interest — which can be as specific as people who like photographing trains — is a major focus of development efforts.

“For many years people have been hosting large panels and Q&As and trying to use our service to make it work, and it’s been a little hard,” Citron said.

The company has incorporated a new user interface and there is more to come in making the experience better for communities to host talks, which will increase discovery on the platform. “So you can find the public conversations happening all around Discord. And we will allow communities to monetize it,” Citron said.

– CNBC