Slack Technologies Inc.’s share price surged more than 20% today following a report from the Wall Street Journal that Salesforce.com Inc. may be looking to buy the company.

The Journal’s sources said that an acquisition, if it happens, would likely value Slack above its market capitalization. That stood at about $17 billion prior to the report, though it has since passed the $20 billion mark as a result of the jump in the team chat provider’s share price.

The negotiations could end without an acquisition agreement. In that case, some of the Journal’s sources said, Salesforce may seek to acquire another market player. 

The report comes just a few months after Salesforce introduced a built-in chat tool for its flagship customer relationship management platform. The tool, which is aimed at sales and customer service teams, also provides other collaboration features such as the ability to automatically notify colleagues of important events. If Salesforce ends up buying Slack, it may use the team chat provider’s technology to strengthen the native collaboration capabilities in its CRM.

Helping salespeople work together is already a major target use case for Slack. On its website, the company says  its service can reduce deal closing times by a factor of four through streamlined collaboration and positions its Slack Connect feature as a way of fielding customer questions more easily. The company also provides integrations with Salesforce. 

Beyond unlocking potential synergies with Salesforce’s existing products, buying Slack would transform the CRM giant into a major player in the collaboration market. Slack reported more than 130,000 paying customers in its most recent quarter and had more than 12 million daily active accounts when it last shared user numbers in September 2019. That user count has likely increased substantially since then, if Slack’s strong revenue growth over recent quarters and growth figures shared by rival platforms are any indication.

A Salesforce-Slack deal would mean more competition for those rival platforms, notably Microsoft Corp.’s Microsoft Teams. Microsoft competes with Salesforce in the CRM market and other areas. Salesforce, with its vast enterprise installed base, could use its market reach to promote Slack to the world’s largest companies in the event the reported acquisition talks lead a deal.

Salesforce is no stranger to using big acquisitions to expand into new markets. Last year, it spent $15.7 billion to buy data visualization specialist Tableau. The year before, Salesforce inked a $6.5 billion deal to acquire MuleSoft, whose technology for managing application programming interfaces helps companies share data among their systems. 

Photo: Slack