Zoom Is YouTube, Instagram, and WhatsApp – All in Two Months.

If you’ve read Shoshana Zuboff’s Surveillance Capitalism, you likely agree that the most important asset for a data-driven advertising platform is consumer engagement. That engagement throws off data, that data drives prediction models, those models inform algorithms, those algorithms drive advertising engines, and those engines drive revenue, which drives profit. And profit, of course, drives stock price, the highest and holiest metric of our capitalistic economy.

So when an upstart company exhibits exponential growth in consumer engagement – say, oh, 3,000-percent growth in a matter of two months – well, that’s going to get the attention of the world’s leading purveyors of surveillance capitalism.

And in the past week, Facebook and Google have certainly been paying attention to a formerly obscure video conferencing company called Zoom.

As I’ve already pointed out, Zoom has become a verb faster than any company in history, including Google. The COVID-19 pandemic shifted nearly all of us into a new mode of video-based communication – and Zoom just happened to be at the right place, at the right time, with … a better product than anyone else. As of this writing, the company’s user base has grown from 10 million users a day to 300 million users a day – that’s two times bigger than Twitter, and nearly 20 percent of Facebook’s entire daily user base.

That, my friends, is an existential threat if you’re in the business of consumer engagement. Which is exactly why we saw news on the videoconferencing front from both Facebook and Google this week.

Item #1: This past Friday, Facebook announced Messenger Rooms, a video conferencing app that allows up to 50 people to have Zoom like experiences for free.

Item #2: Not to be outdone, Google today announced that its Meet videoconferencing tool, which formerly came with its paid G Suite service, is now free and will support 100 simultaneous users.

Item #3: Zoom’s high flying stock has lost 13% of its value since those two events.

Both companies are attacking Zoom’s core business model: paid software as a service. As I’ve explained in earlier posts, Zoom offers a limited free service, and is in the business of convincing folks to pay for more premium features. This SaaS model works well in the world of enterprise (business to business) but when it comes to us consumers, well, the only place we’re willing to pony up at scale is entertainment (think Spotify, Netflix, etc.). Anything else, we’re fine with ads, even if they’re annoying.

The research we’ve done at Columbia SIPA shows that Zoom’s privacy policies would allow it to get into the ads business. Will it?

Facebook and Google’s news certainly forces Zoom’s hand. It’s now squarely in the crosshairs of the two most valuable advertising companies ever created. Will it pivot to an advertising model, as I speculated earlier? Will it succumb to an acquisition offer, as engagement traps Instagram, YouTube, and WhatsApp did before it? Or will it find a third way, and build an entirely new consumer behavior based on a paid service, free of the surveillance capitalism model that has dominated consumer apps for the past ten years?

Pass the popcorn, folks. This is going to be a great show.