This is Bloomberg Business Week with Carol Messer and Jason Kelly on Bloomberg Radio, and the cover story of Bloomberg Business Week magazine is all about Zoom, and as we talked about earlier with our own Drake Bennett and Joel Weber of Business Week. You know, I didn't know what Zoom was. I now know what it is. I've created my own conferences, you know, my own calls with family I've done. That's saying something about ease abuse, isn't it? Yes, because I'm not, as most folks know, UM, not so
good when it comes to technology. That's not an expert. You're very proficient. But but I don't think anybody sent that because in college I would run the board. I did really well. I'm actually, you know, not so bad. Everybody just likes to jump on me. Um. All right, But check it out. Zoom in a in a market year where there has been so much volatility and most names are down for the year, shares of Zoom the usage is up and the stock is up eighty three percent. Jason, Yeah,
it's really really interesting to watch. And I have to say I was on a Zoom call, uh with an investment banker friend earlier, and you know, because it's nice to see people, and I think that we're going to get a conversation and it works really well. Ready, bunch element. I kind of love if you've got a bunch of people on there. And he basically said, he's like, listen, I'm spending more time on Zoom than with my family at this point. And that's saying something because we're all
spending a lot of time with our families. But you know, a lot of companies have have set this up. It is a way that they are communicating with each other. You know, it's interesting to hear from and I don't know what platform they're using, but to hear from Simon Allen about the power of video and the fact that he is taping videos that he's pushing out to his staff updates. I do think, you know, we get so used to seeing people that it is nice to see people.
It's nice to see you. You know, we have our little system here set up. You're the only person that I get to see UH on the show, and I get to see you roll your eyes. I know you do. Indeed, all right, we do want to get to the cover story, UH that we said, it is about Zoom, which has gone from conferencing app to the coronavirus pandemic social network. It has led to a soaring of both usage demand and,
as I mentioned earlier, zoom stock price. It's also led to some concerns about privacy and use of data about the app. But we're gonna get into all of this. Eric Uan, Uh, you want to excuse me. It's founder and CEO of Zoom. He joins us on the phone from San Jose, California. Eric, so great to have you here with us. Um, welcome to Bloomberg. You, your family, everybody's doing okay? Yeah, thank you for having me. Yeah, thank you so much. So talk to us about Zoom.
As I kidded earlier, I didn't know about it. Now I've been on many Zoom calls. I've done a yoga class, organized family meetings. Uh that where I've got family. I'm a large family across the country. Talk to us a little a little bit about usage and the demand that you're seeing. Yes, well, first full you know, when we start it. And prior to these surprises, Zoom were beautiful serving the business and interprise customers and recently giving the
usage from consumers or the consumer use cases. We had a two payward right to focus on those branding new users, branding new use cases because we really want to help out, you know, during the crisis and the uses for sure, it's it's much higher than before because you know, branding new users, branding new use cases from all over the world, and we're working extremely extremely hard and to handle all kinds of for its use like a capacity, the consumer
use case, privacy, and the SWANSUL for us right, And I just want to put some numbers, Jason just before you jump in, because I know Draken mentioned you guys had about ten million daily users in December. That number now is Jason about two million. Yeah, it's amazing. And so how do you cope with that? Eric? And in terms of just the physical capacity the infrastructure that you needed to get online and presumably get online very fast.
And first of all, it's extremely extremely hard. We have to train the software, but it was more important that actually really really preciated a two of our partners. With all of those two partners, well, I think we cannot survive, you know, every night when you need ddit, you know, saws out in the service. And then Andy the CEU of A W. S. Amazon. You know, it did a great job because the team structure really haled us, and the Oracle Larry and A Suffer their Utible club also
haled us a lot. I think those two greater partners and really help us to scale our backing and give us a more compacity Without an Amazon, without an Oracle, I think you know we are we already have a huge full. Well, it's interesting. I mean it sounds like
you you went right to the top there. I mean that just sort of shows you the the interest in this in in many ways and the importance of your partnership for those companies they see you as as obviously just driving a huge part of the economy that has gone virtual rather than than physical. It sounds like you are right. I would say I would be able to credit it. You know, the Amazon and Oracle. They you know, especially Oracle, they did it procatively in order for for
any business. They just want to help because this is a you know, crisis. You know, they wanted to all they can to help. They look at what do we need? They did everything proacatively to help us, you know ND as well the Amazon as well. I think this is the time to show the corporate social responsibility and nobody is talking about you know, seals, the marketing or anything else. This is a greater, you know, a greater role model for many companies to follow. So Eric, you know, the
usage numbers and the increases are just unbelievable. Uh, And I am curious how much of what's happening today do you think translates into longer term usage trends, especially once we get on the other side of the virus. That's a great question for now, and we really really do not think about that. The reason why now the number of priorities maxtro sory that existing uses fixed, all the privacy, any potential security use and because this is a critical time,
this is a crisis. As long as we can keep the currnity you know, working from home already ware charity to have every Americans and you know, okay at a home and also make sure the hype of the economy that's our top of arty regarding the future and what's going to happen with really the doll folks on that. We also do not the folks on monetization either. I think it's time for us to really help out to
help the economy, to help the society. So, Eric, what we have to talk about the education side of this UM. I know that you have taken some criticism here in New York City and elsewhere for some privacy concerns, especially because it is being used so heavily in a classroom of virtual classroom setting. Help us understand what happened and what you had to do in response. Yeah, when we started, actually we jumped on the uh you know, too quickly
because Friday school shot down. Were working so hard all the way we can. Hey, let's do something to have the new community and ad a capacity. Let's all for the free caredle school access. I think we have a good intention. Unfortunately, you know, our service was beautiful serving indervise customers. We have all kinds of security features beauty in normally the enterprise I T team, they will decide which feature to enable, which features to visible and treat
the users before they come on board. And for those of schools. So I think we many mistake. You know, we should not not only do we offer service, but also shouldn't play a I T room for them. You know, on de Went we should enable password. On devent we should have disable. Attendee shared on de went we shouldn't enable waiting room, but afther to learn that we took you know, we took quick actions already and this issue,
those issues already fixed. And but New York in the cities, public school where steering the process working together with them because you know a lot of public schools and in New York they all working workers, gather with us directly and if they wanted to manage, you know, more like manage all the schools with the monster account to make sure enforced the security setting right, I think they are doing the right scene and then in the process still
working together with us now, so you know, some of the other concerns were I mean, Taiwan was concerned about UM data that was going through UM and traffic that was going through Chinese data centers. From what I understand, you folks have said that you mistakenly sent that traffic through UM. Has that stopped completely that company is talked about Friday. I want to clarify that it's not all
every medium center to China. Just that's why people, I guess probably agreed that the heightl and news and in the future after reread and it's standarbod skiing on hopefully have the in the tunity this impact. The problem is we have a global dishuman medium center. So if you and I would have a meeting here, suppose both of
us we should connect to our usc defender. But in extremity rare casius and then the one for the attendee headed a connection problem and will try to many many times go back to our back copet, get back competata center backup. But data center has a complication problem. And also the store in China also there, so meaning in the rare where it keeps it. It's by the way, it's a random, it's where we're random. Also that's our
Zoomer China data center. Plus we also know which meeting water time, which participant had a connection problem, you know, looking through our zoom China data center. We have all those information. And this is to already completely fixed, not a liken you know, all the data to standards to China or in something like this there's a piping. No, it's a completed random. We have all those logging data. So that's why we have a high competence. I guess they may not do that. But now well and let
me ask you too. I mean, I'm curious what your responses to the news that Google, um SpaceX Tesla they're not allowing employees to use Zoom because I think some of what you said about with privacy concerns or other problems is it's because it's non business users who don't know how to set things up securely. These are companies that certainly know how to do that. So what's your
response to those companies not allowing their employees to use Zoom? Yes, beastly was our customers before and also and I think even before this, because you know, we made a mistake, you know, our iPhone plan and embedded uh you know Facebook as DK and you know some of the you know, not a sensitive or personal human mintion, you know, send it out And that's the reason why you know, even before this, you know this is this they feel like, hey, we need to really focus on those kind of problems.
I think that's why we are going to freeze any new features in the three months with double down troop down on those uh, you know, the issues. And I think we are going to win the truster back and you know that's uh, we are going to work at ten times harder and to win the trusterback for those users. And so Eric, you know, another sort of looking ahead question in the sense that I think we all agree to some extent or another that our lives, our world
is fundamentally changed here. And I do wonder as more companies, you know, start to think about remote we're thinking about changes in commercial real estate. We're thinking about all these ways that that our lives have changed, how we communicate personally, how we communicate with with business. Look around the corner for us, how does this platform, how does your platform change? How do you sort of keep ahead of competitors in
some ways? So that's a great question. I think because of this crisis, our copud, this crisis can in the world very soon. It's you know, so painful for airbe I think after this crisis, I think the way to work is very really be very very different. And the I will say, you know, to working from a home might have become as very common now, right and the cost you know, pH now more like a stress test to see if it's working from the home works on
not I think it does to some extent. So and also the consumer use case and ability to use case. I think the bondary is not you know where you know, the career anymore. So that's why we need to really think about. You know, on the one hand, we keep serving our big in the best customer that's our focus. And also given that so many consumer use cases, you know, how to make sure we really balanced that it really fixed on privacy, really consecurity. Right, this is something you know,
it's overnight. You know, we are facing this kind of problem and it's pretty tough, and we're taking these kind of things where versus so in terms of the privacy concerns. And also there were concerns about you sharing, you know, Zoom sharing data with other companies. Um, I think whether it was Facebook and some others, Um is that not happening? So the Facebook issues already fixed, I would realize in two weeks ago and within twenty four hours were to
fix that. Essentially. That's uh, we invented the Facebook a SDK into our iPhone clad and we did not know. We did not know when we initialize as TK. You know, some of the device in the mission again not a personal sensitive emission and stand it to the Facebook. So we do not know that it's more like the software book. We always completely fixed that within twenty four hours. And yeah, so that easy order fixed. So we never wanted we we never have any intention to sell any consummate dangers
with any other sort of party. So how do you I mean, I guess another future looking question here, Eric, This is a question that we're asking so many leaders that we talked to, entrepreneurs, investors, college presidents, everyone. We just spoke with the CEO of McGraw hill, who obviously is very familiar with your work being in the education space, and and we do wonder what does the world look like on the other side of this. You know, you
mentioned work changing, you mentioned our our lives changing. But what are some ways maybe that we're underappreciating in terms of how the world will be different as we start to figure out this new normal. H That's a great question for now, actually for us, you know, seriously, we just you know, get a bit and make sure service
people service off. And also baber Don Trooper, don't our investment of privacy and new with any potential security issues and all then those two things and uh, we we are really don't all have abandonmy is a single of that. It's because this is full of uncertainty. This is unpreced innate, and it's really hard. I know, everything is it's struggled. We also struggled right through the kind of never realized this kind of a youth case and the trafficer. So
we we really do not have Bandamy is single. Would you know the future? Just you know, folcus on today, you know, keep a service off. But wait a minute, Wait a minute, Eric, you are someone who you know, anticipated the future that we would need a service like this that was easily usable. Do you anticipate though, that maybe when we get on the other side of the virus, that we do have a world where more people are
much more comfortable talking this way. There's got to be some you know, you know, put on your futurist hats at some point you know that you see, you know, a different kind of future, or do you not. That's a great point. You're so right. We should and we really we should. But for now, we just you know, you know, put all the effort, you know, focus on the scitability and privates and you know, as I mentioned earlier, but this is a great point. I think you are
right home. But this shouldn't be something we needed to think about it, you know where very quickly and seriously, I do want to ask you one thing because I am looking. You know, we're Bloomberg. We love numbers. You know, you are a company now with a thirty four billion dollar market cap at about six hundred and twenty two million in revenue. What is necessary for you to really grow into um that market cap valuation? What do we need to see from Zoom in the next six or
twelve months for that to be justified? Because if you look at a pe ratio, it just doesn't make sense at this point. So what do you need to do to really grow those revenues to grow into that market cap? You know, I'm essentially I'm an engineer, right, so I'd like to focus on something you know that it can be and the our control for anything that out of
our control. I really do not know what had happened, you know, even last year, you know, we've been a public and a publicly mention, you know, and the stock price high. Seriously, I had no idea, and maybe everybody to think that the future is about a video communication or not, I should have certainly I had no idea. If you ask for me, I posted to think that stop prices. It's so high. I mentioned that last year I would have been the public already, and I keep
mentioning that, you know, for now it's still high. You know, I think you look at the p you're so right, and this is a number just ridiculous. I and again, this is all of our contol I never pretty attention to stop right. I would say, just to focus on the usual experience, focused on you know, make sure our customer happy. And the store prices will be taken care of in the future, but for the time being, we just to keep it working hard, focus on long term
shareholder value. But the sort of the stop price, I really don't understand, really or not. All right, We're gonna leave it here. We really appreciate your time today. Eric Juwan is founder and CEO of zoom h. It's a company everybody is talking about. It's the cover story of Business Week this week. And I have to say good for him for taking a lot of of stuff head on,
you know. I I have to say a lot of CEOs in this situation taking the criticism U that they have UH would sort of shrink back, and he is taking it head on and answering all the questions, and you know, this is a guy who certainly gives the impression that he's doing his best to solve these problems girl. Right, And with a technology company, you know, often something's out there for a while, you work out the kinks in it, right, that's just the way it happens. And it's with a
smaller pool of users and they figure it out. And no small pool of users here, no, exactly right, it's just you know, UM taken off exponentially in terms of the number of users, and so the problems are also going to be exacerbated and we're going to hear a lot about them. But I am I agree with you, Jason. I'm really impressed to hear a CEO who just says, Okay, you know, we messed up some things. We're working on it. We we addressed it. Because that's reality. We can all
relate to that. Yeah, it's refreshing when when the CEO comes on our show and basically says, yeah, we made a mistake, we messed that up, and then we fixed it and we're doing our best. We're talking to this person. We're talking to that person to hear him talk about the stock price, right and say you know it's too high ridiculous. Yeah, I'm going to tweet out exactly because it was pretty impressive. Alright, you're listening to Bloomberg business Week.
I'm Carol Masser along with Jason kelly Er. Thanks again to uh Eric Uuan, the founder and chief executive officer of zoom. It is the cover story of Bloomberg Business Week magazine. I highly recommend, written by Drake Bennett and Nico grant Um. Definitely check it out because a very smart story and you learn a lot about that company.