Verizon to acquire Zoom rival BlueJeans for 'less than $500m'

BlueJeans doesn't offer a free video-conferencing service like Zoom and Skype

Verizon Communications announced yesterday that it has entered into a definitive agreement to acquire BlueJeans Network, a privately held video conferencing rival to Zoom.

The companies did not disclose the terms of the deal, but a report by the Wall Street Journal claimed that Verizon will pay less than $500 million for BlueJeans as it looks to tap into the rising popularity of video conferencing apps amid on-going COVID-19 crisis.

BlueJeans was founded in 2009 and is said to have nearly 15,000 business clients presently. Its video conferencing software is primarily aimed at business users. It doesn't offer a free version as Zoom, Skype and others do.

Last year, CEO Quentin Gallivan said in a blog post that he expects the firm to become "profitable and operating cash flow positive over the next few months."

The BlueJeans acquisition is expected to complete in the second quarter of 2020, following which its founders and executives will join Verizon.

The mobile carrier said in an online post that BlueJeans will be "deeply integrated" into its 5G offerings. The company also aims to use BlueJeans to help customers build out services like remote training tools, online education platforms and telehealth.

Since the start of coronavirus pandemic, video conferencing apps have seen immense increase in their popularity. Zoom has specifically benefitted from current situation to become the face of work-from-home concept. But, it has also faced multiple security issues in recent days, including "Zoombombing" phenomenon, which lets uninvited guests to join and crash a meeting.

Zoom was also accused recently of sharing users' data with Facebook. Security researchers have also reported a number of bugs in Zoom software in recent days.

As a competitor to Zoom, BlueJeans has also seen a surging number of users since the start of coronavirus pandemic. A big selling point for BlueJeans compared to Zoom is its added layer of encryption that Zoom is currently working to implement.

"Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months," said Tami Erwin, CEO of Verizon Business.

"We are excited to combine the power of BlueJeans' video platform with Verizon Business' connectivity networks, platforms and solutions to meet our customers' needs."

Quentin Gallivan, CEO of BlueJeans Network, commented: "The combination of BlueJeans' world class enterprise video collaboration platform and trusted brand with Verizon Business' next generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers."

"We are very excited about joining the Verizon team and we truly believe the future of business communications starts today."