TOPLINEVerizon reached an agreement on Thursday to purchase Zoom rival videoconferencing company, BlueJeans, as it aims to compete in an industry that’s benefiting from an unprecedented number of Americans working from home.
Verizon stock rose on the news, while Zoom shares fell.
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Verizon will pay less than $500 million for the company; the deal is expected to close in the second quarter of 2020, sources first told the Wall Street Journal.
As remote workers rely on Web tools to connect during the pandemic, services like Zoom, Slack and Microsoft have been in high demand: Verizon’s latest acquisition shows that it too is trying to capitalize on this trend.
The mobile carrier said it aims to use BlueJeans, which has more than 15,000 customers, to help companies build out services like telehealth, online education platforms or remote training tools.
BlueJeans is more focused on businesses rather than consumers, offering encrypted videoconferencing—but at a price, whereas rival services like Zoom and Skype are free to use.
The company, with which Verizon first entered into discussions last year, counts Facebook, LinkedIn and Zillow among its customers.
BlueJeans will become “deeply integrated” into Verizon’s 5G offerings; as a competitor to Zoom, it has similarly seen a surging number of users since the coronavirus pandemic started.
“As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise-ready, secure and frictionless and that integrate with existing tools,” Verizon Business CEO Tami Erwin said in a press release.
Verizon’s stock rose by up to 1.3% on the news. Zoom shares fell over 1.2%.
What to watch for
As Zoom quickly became one of the most popular videoconferencing tools for employees working from home, the company has faced backlash for apparent privacy and security issues with its platform. Some organizations, such as the New York City Department of Education, have banned workers from using the service as a result. “We see an opportunity with our distribution channel,” Verizon CEO Hans Vestberg said on CNBC, when asked about competing with platforms like Zoom.
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