the westminster news
Published by the students of Westminster School
The Rise of Zoom
By Niclas Swahn '22
Ten years ago, Chinese entrepreneur and software engineer Eric Yuan started a small video conferencing company in the face of scrutiny from the market. Investors doubted the possibilities of another service in a market dominated by Microsoft’s Skype. It only took nine years and a pandemic for Zoom to take over the video-conferencing world and become a staple in our daily lives as students.
In December 2019, Zoom had a daily peak of 10 million active users. Contrast that to three months later, when the company boomed to over 300 million daily active users, the majority is within the corporate and education sectors. It is not an exaggeration to say that everyone is using Zoom as the primary conferencing service. At Westminster, from our daily classes to club meetings and chapel, Zoom has done its best to replicate the face-to-face daily interaction that is not possible during this pandemic.
Zoom’s stock has been on a steady increase in the past year with correlations in usage rates with the return to school, specifically a recent boom on Sept. 1. Zoom shares currently sit at $483 as of Oct. 3, displaying the company’s value at 1,000x its net earnings. The overvaluation is in correlation with the temporary boom in usage of video-conferencing services, with social distancing measures and the global pandemic.
Zoom has only continued to grow in the second half of 2020, adding 105,000 new customers and an 81% increase in revenue. The increase in revenue brings Zoom toward a more realistic but still overvalued price. However, Zoom is expected to fall back to a more reasonable value within the next year, in correlation to the decline of the coronavirus pandemic as people shift away from social distancing and reliance on tech services. Only time will tell how a move toward normalcy will affect the newly crowned tech mogul of Zoom.
To read more, click here.
Comments are closed.