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Can Zoom turn popularity into profit?


When it comes to its growth rate, video conference company Zoom has lived up to its name.

Use of the firm's software jumped 20-fold in the first three months of the year, as the coronavirus pandemic forced millions to work, learn and socialise remotely.

But it's not clear the newfound ubiquity will help it be a money-maker.

Zoom has warned of increased costs, while the spotlight has also brought scrutiny of its security practices and ties to China.

The company's share price has roughly tripled in value since January nevertheless, surging past $200 on Monday - a day before investors are to receive a quarterly update.

"They were on a very strong trajectory before... and happened to be in the right place at the right time as the whole world decided we needed to communicate well on video," says Ryan Koontz, managing director at Rosenblatt Securities.

"They have this amazing brand... now they have to leverage that brand and figure out which markets they're going to go after."
How did Zoom start?
Founder Eric Yuan didn't really intend to make Zoom a household name.
A Chinese-born software engineer, Mr Yuan started the company in 2011, after years rising through the ranks at WebEx, one of the first US video conference companies, which was purchased by Cisco in 2007 for $3.2bn.

At the time, he faced doubts from many investors, who did not see the need for another option in a market already dominated by big players such as Microsoft and Cisco.

But Mr Yuan - who has credited his interest in video conferencing to the long distances he had to travel to meet up with his now-wife in their youth - was frustrated at Cisco and believed there was demand for software that would work on mobile phones and be easier to use.
(bbc.com)

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