How Does Google Meet Make Money?
Alphabet’s (NASDAQ:GOOGL) Google continues to enhance its Google Meet video chat software. Meet is a video chat and video conferencing tool designed specifically for business users. According to Reuters, Meet is adding new features, including a Gmail link and a Zoom-like layout.
The demand for video chat tools has increased during the COVID-19 pandemic. To curb the spread of the deadly disease, companies have asked their staff to work from home. People have turned to video chat tools like Google Meet and Zoom (NASDAQ:ZM) to collaborate on projects remotely. Other business video chat and conferencing tools include Cisco’s Webex and Microsoft’s (NASDAQ:MSFT) Teams.
Notably, the move to bolster Google Meet with Zoom-like features comes on the heels of Google banning its staff from using Zoom software on company laptops. Zoom has suffered security lapses lately, which resulted in bans by some companies. Elon Musk’s SpaceX and Standard Chartered are some of the companies that have discouraged the use of Zoom software.
Google Meet is a component of G-Suite
Previously, Google Meet was called “Hangout Meet.” The rebranding happened just a few weeks ago.
Meet is a component of Google’s G-Suite—a collection of cloud-based productivity apps. G-Suite is aimed at business customers and is available on subscription. G-Suite plans start at $6 a month per user and go all the way to $25 a month per user. The cost of the plan determines how many people can participate in a Meet video conference. In comparison, Zoom plans start at $15 a month.
G-Suite and its Meet component are part of Google’s cloud products. Last year, Google tapped a Microsoft veteran to run its G-Suite business. Currently, Amazon (NASDAQ:AMZN) and Microsoft dominate the global cloud computing market. Google aims to become the world’s top cloud company in the next five years.
Google generated $8.9 billion in cloud sales in 2019, which increased from $5.8 billion in 2018.
COVID-19 creates a boom for Zoom
Zoom has benefited from pandemic-driven demand for video chat and conferencing software. So far, the stock has soared 120% year-to-date. In contrast, the stock of Google parent Alphabet has fallen for the year despite the strong demand for Google Meet software. Alphabet stock has come under pressure. COVID-19 has been negative for Alphabet’s core advertising industry.