Data Sheet—Friday, March 25, 2016

I must confess a habit of mine with you, Data Sheet readers. Every day, while I tap away on my laptop in Fortune’s San Francisco bureau, one tab in my browser remains constantly open: Facebook.com.

It’s not to see the new photos or funny jokes my friends publish to my News Feed, though I admit that I sometimes glance for that reason. It’s to leave it on in the background on the off-chance that I receive a chat message from someone I know.

Facebook has long been characterized as a place to store and share photos. (The “poke” is pretty much dead, people.) But one of its other killer functions is messaging, and Facebook knows it.

On Thursday the social network redesigned its Messenger mobile app, adding new features like birthday reminders and a section for favorite contacts, among others. But its addition of a “Home” tab speaks volumes about how important the chat function has become to the Facebook ecosystem.

Facebook first released the standalone Messenger app in August 2011. Almost three years later the company shut down the chat functionality within its namesake app and forced all of its mobile users to download Messenger instead. It was a not-so-subtle hint. Today, Facebook doesn’t even want you to use your smartphone’s most basic function—voice calls—instead baking the capability right into Messenger.

Expect to see more moves like this. The messaging app is the technology industry’s latest great hope—a millennial-seducing powerhouse of potential that, for Facebook anyway, could one day grab more of your attention than its flagship social media service. (You can thank Snapchat for that.) For those keeping score at home, today’s Messenger app now has more than 900 million monthly active users and features that include video calling, group chat, peer-to-peer payments, chat bots, and myriad other bells and whistles.

It’s only a matter of time before my friends’ updates and shared news articles show up in Messenger, too, sprinkled between relevant conversations. And maybe—just maybe!—I’ll never have to keep a browser tab open for Facebook’s classic News Feed ever again.

Have a great weekend.

Kia Kokalitcheva is a reporter at Fortune. Follow her on Twitter or reach her via email.

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BITS AND BYTES

Microsoft's new business partner? Mary Jane. The tech giant has partnered up with Kind Financial, a financial technology firm that focuses on the marijuana industry. Although cannabis is still mostly illegal in the United States, Microsoft is offering its services to regulators. Kind will use the company's Azure cloud to crunch supply chain and compliance data. At present, New York State regulators use Oracle. (Fortune)

Salesforce considered a bid for LinkedIn. Salesforce CEO Marc Benioff confirmed that his cloud company was a contender for the professional social networking site. "We gave it a solid look," he said, but Microsoft ultimately offered the company a better deal: higher valuation, operational independence, cash. (Fortune, Recode)

AppDynamics confidentially files for IPO. The IT analytics company has quietly signed on Goldman Sachs and Morgan Stanley to underwrite an initial public offering, potentially slated for later this year. Only two other tech firms have gone public this year: Acacia Communications and SecureWorks, though Twilio is expected to set its pricing next week. (Fortune, Wall Street Journal)

Magic Leap teams up in galaxy far, far away. The much-hyped, secretive mixed reality startup has joined forces (no pun intended) with ILMxLAB, LucasFilm's augmented reality special effects lab. Leap's founder, Rony Abovitz, announced the partnership at a Wired conference in New York where he played a clip demoing the company's tech that featured two favorite droids from the Star Wars universe: C-3PO and R2-D2. (Wired)

Microsoft buys Wand Labs. Fresh off its LinkedIn acquisition, the Redmond, Wash. software giant has picked up a small chat app company. Wand's tech connects features within messaging apps to other smartphone services. Imagine learning the song your friend is listening to, and being able to instantly stream the video through YouTube or purchase it on Amazon. It's not hard to imagine integrations with Cortana, or chat bots. Terms of the deal were not disclosed. (Fortune)

THE DOWNLOAD

Fortune's Dan Primack explains why M&A deal-making is back in the cloud industry.

When Microsoft agreed to acquire LinkedIn earlier this week for $26.2 billion, it prompted speculation that the software market might finally be waking from its long M&A dormancy. But I don’t think this was the right way to think about it. Instead, Microsoft buying LinkedIn should have been viewed asconfirmation that software deal-making is back.

Just hours earlier, Symantec had agreed to pay $4.65 billion to purchase Blue Coat Systems, a private equity-owned cybersecurity provider that had been planning to go public. The previous week, Salesforce had agreed to buy Demandware for $2.8 billion. And then there was Vista Equity Partners recently agreeing to snap up both Marketo for $1.8 billion and Ping Identity for an undisclosed amount.

If three makes a trend, then Microsoft-LinkedIn is just part of something that has already been established.

So what has changed? In short, prices. Read the rest on Fortune.com.

IN CASE YOU MISSED IT

Donald Trump Cable News Channel Could Be Coming by Michal Addady

How to Get iOS 10 and macOS Sierra Early by Don Reisinger

Hulu on Oculus Rift: Streaming TV in Virtual Reality by Tom Huddleston, Jr.

Appeals Court Just Gave a Big Copyright Victory to Music Sites by Jeff John Roberts

Silicon Valley Investor Michael Moritz Calls Trump A "Loser" by Leena Rao

Uber Says It's 'Profitable' in Its Most Developed Markets by Kia Kokalitcheva

Public Cloud Is Safest Option for Businesses, Says Google Cloud Chief by Barb Darrow

Sweden Is Testing Blockchain Technology for Real Estate Transactions by Reuters

Apple Sued In China For Allegedly Copying iPhone 6 Design by Don Reisinger

Nintendo Pokemon Go Smartphone Game Coming in July by Benjamin Snyder

Goldman Sachs Has An Incredible Criteria For Flagging Troubling Emails by Lucinda Shen

'Finding Dory' Could Be the Biggest Disney Pixar Movie Ever by Tom Huddleston, Jr.

Oracle's Revenue Slides Amid Weakness In Core Software Business by Reuters

ONE MORE THING

Meet Ollie, a smart shuttle. The brains of this new 3D-printed self-driving shuttle created by Arizona startup Local Motors are powered by IBM's Watson. The company plans to test the vehicle in Maryland and Washington D.C. this year—and potentially also in Miami, Las Vegas, Germany, and Denmark. (Fortune)