As social-distancing measures have taken hold, Zoom Video has seen a huge uptick in nonbusiness users looking to connect with others from home.
Photo: Nir Alon/Zuma PressZoom Video Communications Inc.’s ZM -6.24% newfound popularity amid the coronavirus pandemic is proving both a boon and a burden.
Once a business-focused communications tool provider, the San Jose, Calif.-based company has almost overnight become a mainstream consumer brand. It has won millions of new users looking to connect with colleagues, family and friends while stuck indoors—hosting events such as yoga courses, remote classes, and virtual cocktail hours.
But that success is stretching its workforce, exposing gaps in Zoom’s ability to satisfy both its paying customers and the new users now flocking to its free service. The surging popularity also has given rise to a new form of online harassment, known as Zoombombing, where online trolls sneak into meetings and cause disruptions.
Jasmine Fallaha, an 18-year-old senior at a Bay Area high school, had never heard of Zoom Video until the coronavirus outbreak when her boyfriend was using the service for school. When her school closed last month, Ms. Fallaha turned to Zoom to continue running the Girl Empowerment club she co-founded.
“I tried Google Hangouts Meet, but it was hard to use,” said Ms. Fallaha. “Zoom was just easier.”
It is this kind of grounds-up enthusiasm that has helped drive people to Zoom and investor enthusiasm in the stock. Zoom shares have more than doubled this year, taking the company to a market capitalization of $42 billion, at a time the S&P 500 has retreated about 20%.
But the surge in popularity has come with downsides. Some paying clients—it had 81,900 of them with more than 10 employees according to its latest earnings release, up 61% from the year-prior—say Zoom’s customer support has fallen off.
Daniel Newman, founding partner of Futurum Research, says he started paying for Zoom a year ago to stay in touch with clients, including through a podcast, for his Chicago-based firm that provides strategic advice to tech companies. When he last tried to save his Zoom call to the cloud for distribution, it didn’t show up for days, Mr. Newman said. Emails to Zoom to find out why went unanswered, he said, and when he tried to ask customer service through a live chat service he gave up with almost 600 people in the queue already
“As a paying user, this has been frustrating,” Mr. Newman said. “It seems their sales and user growth has far outpaced the infrastructure. For an enterprise tool, this level of service will be their demise.”
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Zoom Chief Marketing Officer Janine Pelosi said “it’s fair to say this is an unprecedented time,” adding “our company is doing everything in our power to support our customers.”
“Zoom has always prided itself on its customer-first focus and we continue to strive to do all we can to ensure that our customers are happy,” a Zoom spokeswoman said in a follow-up statement. “We are experiencing increased demand for support, and are taking several steps to minimize support wait times.”
The mass popularity also has exposed design issues that have left some sessions vulnerable to abuse. Users in recent weeks have reported a spate of so-called Zoombombing attacks, in which people take advantage of a screen-sharing feature in public conference calls to hijack the sessions, often to spread hate speech or flash disturbing images. Zoom’s default setting allows such screen sharing and many new users don’t know to change them, leaving sessions open to attack.
Ana Agneshwar, CEO of recruitment firm Aimient, was participating in a conference that was zoombombed. About 15 minutes into the meeting, a user kept showing pornographic video using the screen-sharing feature. Eventually the host shut down the call.
“It was horrifying,” said Ms. Agneshwar. “I’m at home with kids. I’m glad they weren’t in the room.” Ms. Agneshwar’s children, like many across America, were using Zoom for remote learning. She sent a note to the school’s principal to ask that the Zoom settings be secured.
Even with those changes, Ms. Agneshwar, who says she is a paying Zoom customer, is worried about other features that are left on by default, such as file sharing and letting somebody rejoin a meeting after they have been ejected.
Zoom, in a blog post, recently advised the hosts of public meetings to change default settings so only the organizer can share their screen or select who has access.
The Federal Bureau of Investigation on Tuesday warned of growing instances of videoteleconference hijacking. It cited examples of two schools using Zoom that had their lessons disrupted, including one where an unidentified individual was visible on the video camera and displayed swastika tattoos. The FBI urged users to take steps to mitigate those threats.
Ms. Pelosi of Zoom said for its growing set of education users, the default setting now is set so screen sharing isn’t automatically permitted. “We listen to the community of users,” said Ms. Pelosi. “If we need to pivot or highlight certain features, that’s what we’re going to do.”
Zoom’s privacy practices also have drawn attention. The company this week updated its privacy policy after Vice Media reported that Zoom’s app was sending user data to a third party. The New York attorney general’s office sent a letter to Zoom this week raising questions about these privacy and security concerns, the New York Times reported earlier. Zoom said it takes user privacy seriously and would answer the attorney general’s questions.
Some of Zoom’s struggles stem from its lean structure and focus on business customers, according to industry officials that have watched the company’s growth. Founder and CEO Eric Yuan spent more than a decade as vice president of engineering for the Webex conferencing system that was sold to networking giant Cisco Systems Inc. in 2007. He started Zoom in 2011 and it went public last year.
Patrick Eggen, an early investor through Qualcomm Ventures and a former board member, said Zoom’s success was largely built on its technology. “Eric knew building the best product was what mattered,” Mr. Eggen said. “In 2011 and 2012, there wasn’t a consumer bone in their body. I don’t believe much has changed."
Since the start of the year, Zoom’s job postings have doubled, according to research from data firm Thinknum. A majority of the jobs are in customer support roles, according to Zoom listings. Zoom’s ranks grew almost 50% last year to 2,532 full-time employees as of Jan. 31, according to its annual report.
The financial implications for Zoom from its popularity are uncertain. The company last month said it wasn’t clear how many of the new users it could turn into paying customers. And, it added, it would have to spend extra this year to cater to its many users, weighing on margins.
Many on Wall Street remain bullish. Wrote Oppenheimer Research: “We believe Zoom can thrive as its video meeting conference capabilities are aggressively implemented across every enterprise, educational institution, and government agency.”
Write to Aaron Tilley at aaron.tilley@wsj.com
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2020-04-01 19:58:36Z
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