Microsoft Tried to Buy Zoom–What Does It Mean That They Didn’t?

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Microsoft tried to buy Zoom before it went public

It could be seen as a victory for the little guy, or as the birth of another big guy.

Video conferencing vendor Zoom recently shed the potential of its private “tech unicorn” status and embraced the reality of life as a public company. And it did so in spectacular style. Valued at around $1 billion less than two years ago, the brainchild of WebEx creator Eric Yuan ended its first day of public trading with a market valuation of around $16 billion.

To reach that colossal payday, Yuan and his leadership team had to resist the temptation that many startups give in to and rebuff an offer of instant millions from Microsoft. That’s because, reportedly, Microsoft tried to buy Zoom several times before it went public, most recently earlier this year.

That it didn’t succeed–Yuan had previously sold WebEx to Cisco–is a testament to the faith the Zoom team has both in their product and in the potential of the video conferencing market at large.

Zoom’s path from startup to a successful public listing without giving in to the overtures of Microsoft is an example other small video vendors may follow. And it is one that will benefit the ever-growing numbers of video conferencing consumers.

There’s a new big guy in video conferencing.

Microsoft Tried to Buy Zoom…and Many Other Companies

The fact that Microsoft tried to buy Zoom is a badge of honor for the latter–it may have even convinced the company of their value. The tech giant has a history of near misses with several of today’s leading digital enterprises.

For instance, Microsoft tried to buy Facebook in the early days of the social media disruptor’s existence–but then, everyone from Yahoo and AOL to MySpace and NBC also took a shot–before settling for a 1.6% stake and a promise to be notified if Google ever came sniffing around.

Microsoft considered an attempt at acquiring workplace collaboration innovator Slack.

Bill Gates’ creation also tried and failed to nab Nintendo, Salesforce, and Yahoo when those companies were at the peak of their powers. Most recently, and perhaps most tellingly, Microsoft considered an attempt at acquiring workplace collaboration innovator Slack. It has been reported that Gates himself talked the current regime out of that purchase, preferring instead to confront the Silicon Valley upstart at its own game by introducing Teams as a Slack competitor–which has produced “so far, so good” results.

The question remains: what would Microsoft have done with Zoom had its offer been accepted?

Zoom as the New Skype

If you have Skype, why do you want Zoom? It’s hard not to speculate about Zoom’s demise, or at least subjugation, had it become part of Microsoft’s tech stable. That’s a loss that would have been felt in video circles.

Essentially, Zoom is Skype. Zoom’s success, as with Skype before it, is due to its easy consumption. The cloud-based video conferencing platform requires no additional hardware, can be downloaded quickly and for free, and has an intuitive, easy-to-master interface. You have to buy a subscription to unlock Zoom’s full potential, but at around $15 a month per user, it is among the more affordable platforms on the market.

A Zoom buy-out would have seen Zoom’s creativity stifled in deference to one of the existing Microsoft video calling flagships.

Skype, on the other hand, is always free, but its features can be interpreted as watered-down versions of what Teams has to offer behind its paywall–the recent background blur feature, for example, arrived on Skype months after it debuted in Teams.

It’s unlikely, had Microsoft bought Zoom, that the company would have run both video platforms in competition with each other and Teams for the same small-to-medium business dollar. At the very least, the net result would have seen Zoom’s creativity stifled in deference to one of the existing Microsoft video calling flagships. Instead, by rebuffing the Microsoft offer, Zoom makes it through to maturation and we get a proliferation of new video conferencing ideas.

The Result of Zoom’s Independence Is Greater Choice

So, Zoom lives on to become what Slack was before it–a disruptor with the potential to improve the video conferencing market. Slack’s innovative central communication hub idea was so popular with the business community that it inspired Microsoft to drop its Skype for Business brand and follow suit with Teams–and others have run with the trend as well, including Facebook, with its collaboration platform Workplace by Facebook.

Zoom’s public status proves that video conferencing has arrived as a workplace communications force.

Zoom also proves to other startups, most notably BlueJeans, that there is life outside of acquisition. Novel video ideas don’t have to become the property of huge established tech companies as happened with Skype, YouTube, WebEx, and more recently Hipchat.

Zoom’s public status proves that video conferencing has arrived as a workplace communications force, and gives credence to overall market valuations that estimate the technology will be worth $20 billion by 2024.

Rather than being absorbed into the Microsoft family, Zoom gets to prevail as a distinct, unique choice in our video conferencing marketplace.

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