Verizon’s acquisition of BlueJeans Network Inc. puts it square in the middle of a sector that has exploded as millions of Americans are forced to work remotely due to the novel coronavirus outbreak.
The deal — which is for less than $500 million — increases the arsenal for Verizon Communications Inc. (NYSE: VZ) as it heads to battle with other carriers in the 5G revolution (check out our free 5G report here).
Verizon shares moved 0.1% higher after the announcement was made.
BlueJeans is a direct competitor to video conferencing giant Zoom Video Communications Inc. (Nasdaq: ZM). However, Blue Jeans aims its products at businesses rather than consumers.
It has around 15,000 customers and is not free to use like Zoom and Microsoft Corp. (Nasdaq: MSFT) chat app Skype are.
BlueJeans — which was founded in 2009 — raised $175 million in venture capital from Accel and Norwest Venture Partners.
Why is Verizon Acquiring Blue Jeans?
The acquisition gives Verizon a “comprehensive suite of offerings that are enterprise-ready.”
“Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months,” Verizon Business CEO Tami Erwin said in a statement. “We are excited to combine the power of BlueJeans’ video platform with Verizon Business’ connectivity networks, platforms and solutions to meet our customers’ needs.”
Verizon’s acquisition of BlueJeans comes as Zoom is under fire for its security practices. Cybercriminals have hacked open Zoom video calls, called “zoombombing,” with hate speech and even pornography.
BlueJeans already counts Facebook Inc. (Nasdaq: FB), LinkedIn and Zillow as some of its customers. That gives Verizon access to large companies from the start.
What Does the Verizon Acquisition of BlueJeans Network Mean?
Verizon’s acquisition of BlueJeans comes at an interesting time.
Workers around the country have augmented their schedules to work remotely as millions remain on lockdown due to the coronavirus pandemic.
Video conferencing services like Skype, Zoom and Cisco Systems Inc. (Nasdaq: CSCO) platform, WebEx, are used to keep those remote workers connected.
By buying BlueJeans, Verizon is square in the middle of a battle for more customers as the lockdown continues.
Additionally, 5G technology plays a big role. Video conferencing will become more of a staple in the workplace as 5G can provide crisper video and cleaner audio.
“The combination of BlueJeans’ world-class enterprise video collaboration platform and trusted brand with Verizon Business’ next-generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers,” said Quentin Gallivan, CEO of BlueJeans Network.
BlueJeans started working with Verizon and Samsung on coupling video conferencing and cellular networks in 2019.