source-codesource codeauthorDavid PierceNEWSLETTER LayoutWant your finger on the pulse of everything that's happening in tech? Sign up to get David Pierce's daily newsletter.64fd3cbe9f
×

Get access to Protocol

I’ve already subscribed

Will be used in accordance with our Privacy Policy

Protocol Source Code
What matters in tech, in your inbox every morning.

How Slack lost the pandemic

Image: Slack / Protocol
Sad Slackbot

Good morning, and welcome to how-is-it-December-already season! This Tuesday, why Salesforce might buy Slack (and why Slack might be for sale), how the price of Bitcoin could keep rising, and Ajit Pai is leaving the FCC.

(Was this email forwarded to you? Sign up here to get Source Code every day.)

The Big Story

What Salesforce sees in Slack

It looks like Salesforce is going to buy Slack. Maybe as soon as today, when Salesforce reports earnings. CNBC reported that the sale price could be "a premium" on Slack's $24 billion market cap, which would make it easily Salesforce's largest acquisition ever.

We'll have more on the deal after it's announced, but this morning let's look at the reasons for the tie-up.

First, what's in this for Salesforce? The chance to be an even bigger part of the future of work.

  • Buying Slack pushes Salesforce even closer to becoming an all-in-one suite of work tools, not unlike Office 365. "Salesforce has an opportunity to make their ecosystem truly valuable to every employee with the addition of Slack," IDC's Wayne Kurtzman told me.
  • Most big-number acquisitions by Salesforce — from $2.8 billion on Demandware to $15.7 billion on Tableau to $750 million on Quip — have been on new software and tools outside of its core CRM business. Along with things like its pandemic-related Work.com product, the name "Salesforce" is less and less applicable over time.

And what's in it for Slack? Well, a lot of people are about to get rich again, so that's fun. But there's more:

  • Slack has been constantly compared to Zoom and Teams throughout the pandemic, and doesn't look good next to either one. If Slack can integrate into the rest of Salesforce's tools the way Teams does into Office 365, it could win the it's-already-right-there battle that so often decides which services companies use.
  • In a way, selling to Salesforce also gives Slack a better chance to achieve its original vision. Stewart Butterfield always said he didn't want to kill email. What Slack actually set out to do was help connect all the other tools people use, to become the hub of a workplace that felt increasingly siloed in dozens of different apps. Salesforce is a heck of a place to do that.

This is a big exit for Slack, but surely not the outcome it was hoping for. For a while, Slack was going to be the next giant in work software, not swallowed by an existing one. So what did Slack do wrong? (You know, other than trying to compete with Microsoft's brutal tactics.) Two things, I think:

  • It missed the boat on video. Sure, Slack has video calls, and made a big deal with Amazon to improve them, but Zoom, Teams, Meet and others bet correctly that videochat was the new organizing principle of work communication. Slack just doesn't offer the same experience.
  • It stayed too focused. I know, weird thing to say! But as work-life balance has collapsed, so has the divide between the apps people use. Zoom has leaned into being a place for yoga classes and happy hours, Teams built tons of features for different kinds of gatherings, but Slack kept focusing on the 9-5. That's a fine business, but it's dwarfed by the opportunity presented by 2020's massive cultural shift. That shift minted new tech giants, and Slack won't get to be one of them.

Crypto

The new case for — and against — bitcoin

Anna Kramer writes: $19,960. That's the new all-time high for Bitcoin, a 175% increase since the end of 2019. But we've been here before: Bitcoin peaked almost as high in December 2017, only to drop precipitously for the next three years, and it was lower than $5,000 even in March 2020. So, for the skeptics in the room, what makes this time different?

The Bitcoin bulls say it could become a modern alternative to gold, a safe bet for institutional investors hedging against inflation. Bitcoin could serve the same functions because it has similar characteristics: It's scarce, and its value has no relationship to political events.

  • There are some important players backing up the institutional argument. Square and MicroStrategy have both parked huge sums in Bitcoin, Fidelity is launching a Bitcoin fund and PayPal and Square now allow users to buy and hold the currency.
  • In October, JP MorganChase analysts predicted that Bitcoin could double or triple in value because of its importance for millennial investors. While gold is scarce, the hard cap on the total number of Bitcoins should allow it to increase in value over time, even if only a small number of those young investors opt for it as a gold alternative.

The Bitcoin pessimists need more evidence than a few months of increased institutional interest to allay their skepticism, though. It's not that they all believe it isn't here to stay (though some do); instead, some are still worried about the speculative investors that have caused volatility in the past.

  • Bitcoin's value arguably depends mostly on how people perceive it and the network of computers that allow it to exist. There's no one institution or government granting it the legitimacy we see in traditional currencies, and that could be a problem over the long term.
  • And in that same much-discussed JP MorganChase note, the analysts included a word of warning. In the short term, they wrote, "Bitcoin looks rather overbought and vulnerable to profit taking."

A few years ago, it wasn't clear whether Bitcoin had a future at all. Heading into 2021, it has the world at its feet, or everything to lose again — depending on your point of view.

People Are Talking

Yet another person claimed to be @VCBrags, though this time Mitchell Wakefield appears to be telling the truth:

  • "The intention with the account wasn't to be as mean spirited as it turned out to be. The account was started with good intentions but zooming out, I guess you can't apply a formula that worked for sports banter on Twitter to VC or business."

More advocacy groups are imploring Joe Biden not to appoint Big Tech to his Cabinet:

  • "The time to hold these companies accountable and rein in their power is now. However, we can only bring these companies to account if you do not rely on affiliates of these very companies to make up your government."

Ron Paul wants President Trump to pardon Julian Assange and Edward Snowden:

  • "Edward Snowden and Julian Assange are not criminals. They are heroes for telling us the truth about what criminals in government were doing in our name and with our money."

A MESSAGE FROM MICRON

Micron

An unprecedented year has accelerated the adoption of a decade's worth of breakthroughs. This is your guide to what's changed. The New Enterprise manual is presented by Micron.

Read more.

Join Protocol's David Pierce and 800+ amazing speakers at Web Summit, the world's largest technology conference, from Dec 2-4. Click here to book tickets.

Making Moves

Mike Berkley is FuboTV's new chief product officer. He joins from Axios, and has also done stints at Spotify and Comcast. (And MoviePass, but I'm guessing he doesn't talk as much about that one.)

Ajit Pai is leaving the FCC in January. His term's not technically up until June. I wonder if he'll leave the mug behind for the next chair?

Josh Elman is joining Apple. The longtime Greylock investor and product exec will be working on the App Store to "help customers discover the best apps for them."

Ian Rogers is the new chief experience officer at Ledger. He's joining the French cryptocurrency startup from LVMH, which he joined after a long stint at Beats and Apple Music.

In Other News

  • DeepMind might have solved protein folding. Its AlphaFold program made a huge leap forward in figuring out how to determine a protein's structure from its sequence, potentially opening the doors to significantly faster drug development.
  • Four new antitrust cases could be filed against Google and Facebook in the next two months, The Wall Street Journal reports. A suit from the FTC about Facebook's Instagram and WhatsApp acquisitions could come in the next few days, followed by a state AG suit. Two Google suits, concerning ad tech and search dominance, are expected in the next few weeks.
  • Apple wanted longer deadlines to comply with the Uyghur Forced Labor Prevention Act, The New York Times reports. It also reportedly wanted to stop some supply chain data from being released to the public.
  • Facebook bought Kustomer for a reported $1 billion. The customer service CRM platform should help bolster Facebook's efforts to turn WhatsApp and Messenger into the future of customer service.
  • Amazon and Apple wouldn't commit to paying their fair share of taxes in France. Microsoft, Google and Facebook signed up to the country's "Tech for Good Call" initiative, but Amazon declined and Apple is still negotiating. Separately, the EU reportedly wants President-elect Biden to clarify his position on a digital services tax by April and Canada announced plans for its digital services tax.
  • Alibaba, Tencent and ByteDance are all reportedly considering buying iQIYI. Alibaba and Tencent held talks with current owner Baidu, according to Reuters, but discussions stalled over Baidu's $20 billion asking price.

One More Thing

And you thought the Mac Pro was expensive

How's this for a holiday gift: An "exceptional, fully functional" Apple I, complete with its Woz-signed box, a circa-1976 Sanyo monitor and everything else you'd need to get this thing up and running again. All for the low, low price of $50,000! (Well, that's the starting bid.) It's part of a big Steve Jobs- and Apple-related auction that starts next week, which also includes Jobs' customer badge from a visit to Intel in 1986 and Woz's hand-drawn Apple II schematics. None of it's cheap, but all of it's awesome.

A MESSAGE FROM MICRON

Micron

An unprecedented year has accelerated the adoption of a decade's worth of breakthroughs. This is your guide to what's changed. The New Enterprise manual is presented by Micron.

Read more.

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day; see you tomorrow.

Recent Issues

It’s Biden time