Studying the Zoom Tea Leaves


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No one can really predict what will happen to our collective behavior and the economy if and when we fight back the latest wave of coronavirus infections. But I find it helpful to look for clues on how companies that have been changed by the virus are spending their money.

For example: Zoom Video, the company whose video conferencing service has become household name over the past 18 months, said Sunday it would spend around $ 15 billion to buy a company called Five9, which makes customer service software Manufactures call centers for companies. As my DealBook newsletter colleagues put it, Zoom is placing a $ 15 billion bet on phone calls.

There are two ways to interpret Zoom’s splurge. The first is that the company operates from a position of strength. Over a year full of people excited about Zooming (or Microsoft Team’ing or Google Meet’ing) has given the company the financial firepower to bet on a new area of ​​growth. What this read basically says is that Zoom doesn’t have to hold back and plan for a situation where people no longer rely entirely on online video for work, school, doctor visits, and family reunions.

Another interpretation is that Zoom believes that our behavior changes from the Covid era are fleeting and that the company must play defense. If Zoom is concerned that people are drifting away from screens, it needs to hedge its bets by expanding into different areas like customer service.

(One silly minor matter: Writing this newsletter spurred me on to hear Aretha Franklin’s 80s song “Who’s Zoomin ‘Who?” It’s not the best Aretha song.

The reality is that both of these readings on this acquisition are likely true. Zoom believes that some of our online video habits are permanent, but also that we won’t be as clinging to our gadgets as we were in 2020. If we reluctantly move on to hugging friends and crouching at our desks over computers – and as Zoom’s competition intensifies – the company must branch out into various services to continue growing.

I don’t want to read too much into a corporate acquisition either. But I don’t want to ignore its deeper meaning. Zoom is just an app, yes, but their business decisions reflect a mood and beliefs about what could happen to all of us.

For many months, people interested in corporate finance have stressed how the habits and attitudes we adopted during the pandemic could persist. They try to predict profit margins and stock prices for companies like Zoom, Uber, and Amazon, but there’s more to it than that.

In assessing what could happen to these companies, the really important thing is to gauge how much we have changed in our hometowns, schools, where we live, transportation planning and the role of women because of the pandemic and the impact of even small changes in behavior the family and our relationships.

Corporations like Zoom act as canaries in the coal mine, what life could be like after Covid. Perhaps the executive director of the salad company Sweetgreen can’t really know how many downtown offices will return to pre-Covid staff levels, but how the company is spending its money is a bet that office life will more or less return to what it was was in 2019.

We have been profoundly changed in a million ways, big and small, by the coronavirus. But we don’t yet know exactly what that means. All that companies like Zoom and the rest of us can do is make educated guesses about the future and prepare to be at least a little wrong.

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  • White House vs. Facebook: President Biden and other US officials in the past few days have blamed Facebook for spreading misleading information about Covid-19 vaccines, my colleague Cecilia Kang reported. Facebook said it was made a scapegoat. Renée DiResta, researching misinformation, wrote a nuanced Twitter thread about the role of social media companies, people with large fan bases, and all of us in spreading fake vaccine information.

  • What does China want from its corporations? Obedience, writes Times columnist Li Yuan. China is moving faster than the United States or Europe when it comes to tackling abuse by tech giants, but “efficiency comes at the cost of laws and due process,” she writes.

  • Governments watching every move of their critics: According to reports from an international alliance of news agencies, governments are using smartphone surveillance software to fight criminals and terrorists in order to spy on journalists, human rights defenders, politicians and others. My colleagues have previously reported on this software from the Israeli NSO group, which monitors every detail of a person’s cell phone tapping and has been used by governments to attack their critics.

Here cats see the musical “Cats”. It is wonderful. (I discovered this video in a recent issue of the Brass Ring newsletter.)

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