What Happened before Google Turned against Zoom?



The rivalry between Google (NASDAQ:GOOGL) and Zoom Video (NASDAQ:ZM) has intensified in recent weeks. The companies compete to promote their video chat apps. Google has Meet, while Zoom has its namesake Zoom video chat app. Amid the pandemic lockdowns, people have turned to video chat apps to stay in touch with family and friends or conduct business.

Zoom has seen a huge increase in demand for its video chat tool since the lockdowns came into force. Companies asked their staff to work remotely from home to stop spreading the coronavirus. Zoom’s big customer gains have spurred the competition between video chat providers. Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:FB) are the other video chat service providers that compete with Zoom.

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Google explored purchasing Zoom

The Google-Zoom rivalry has been hot lately. Last month, Google banned its staff from using the Zoom app on company laptops. The ban weighed on Zoom stock, which had been on fire amid surging demand for its video chat service.

Following the ban, Google made its Meet video app free to everyone. As Google ramped up the competition for video chat customers, Zoom decided to deny Google its cloud business. Instead, Zoom tapped Oracle (NASDAQ:ORCL) as its new cloud provider.

Oracle has serious beef with Google. The company seeks nearly $9.0 billion in compensation for alleged copyright violations.

Long before Google decided to go head-to-head with Zoom, it considered acquiring the business. A group of Google engineers thought that purchasing Zoom would boost Google’s cloud business.

Google depends on its cloud business to diversify its revenue sources. The company has set its sights on becoming the top cloud vendor in five years. However, Google has a long way to go considering how far Amazon and Microsoft have pulled ahead.

Is Google reading from a Facebook script?

Google’s escalating competition with Zoom mirrors a Facebook practice that caught regulators’ attention. Facebook made several unsuccessful attempts to acquire Snapchat. In the end, the company attacked Snapchat, leading regulators to wonder whether Facebook’s practice violated the antitrust law.

Alphabet and Zoom stocks have risen 18% over the past month. However, Zoom stock has more than doubled this year, while Alphabet stock has fallen 1.23%.


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