‘Google Starts Giving Away Meet Video Chat to Catch Up to Zoom’
https://finance.yahoo.com/news/google-starts-giving-away-mee…
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I am going to go out on a limb and say this a non-event from a business perspective. Corporations don’t trust Google (few use Gmail or Google Drive for that reason) and Individuals prefer Facebook (or Apple) over Google for social things such as video conversations. That gives Zoom a big chunk in the middle market with some opportunity to spread into corporate and down into individuals. By giving it away, Google is admitting the are already too late to the game. That being said, Zoom needs to start innovating like Shopify does.
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this a non-event from a business perspective.
I’d argue that someone else giving away for free exactly what you’re trying to sell could be very significant from a business perspective.
FWIW, the corporation I work for uses a combination of Google and Okta.
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I’d argue that someone else giving away for free exactly what you’re trying to sell could be very significant from a business perspective.
Reminiscent of Microsoft and Netscape. The Netscape browser cost around $20, as I recall (in the early 90s?). Microsoft developed IE and just gave it away. Netscape was wiped out. They still make a browser under the Mozilla (Firefox) name, but it’s free and they emphasize they are not-for-profit.
So, yeah, not a model you want to emulate if you have shareholders.
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your example may not be comparable. Netscape had to run on a PC, unfortunately MS controls the whole PC OS and can force bundling of its products. Also, there was no user experience difference between Netscape and IE. Zoom at least for now is differentiated and not relying on any single platform to run. Whether it can grow from here, all depends on its future innovation and execution. Again, Zoom is the only product which is not banned by any countries, not like Facebook or Google.
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Many small businesses use G Suite as an alternative to Microsoft Office. I fully expect that Meet will be rolled into that offering, and given that G Suite is platform agonistic this could lead to broad adoption.
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Sorry, agnostic. Not sure why MF does not allow editing of posts by authors.
“By giving it away, Google is admitting the are already too late to the game. “
Yea these are the kinds of comments I roll my eyes at. Talk about bias.
So Zoom can offer its product for free and that’s sound strategy, but Google offering it for free is an act of desperation. I also doubt that ZM is keeping Google up at night.
I’m long ZM, don’t own GOOG, but be real about your investments, they aren’t your mothers honor that needs protecting.
Well unless some says “Your Zoom wears army boots”, or “you’re a son of a Zoom”. Then I may understand it.
TMB
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I remember using Netscape(free) in the early days of web browsers (mid 1990’s??) on my Macintosh and it was essentially the only game in town. The history of Netscape and the “Browser Wars” is kind of interesting -
https://en.wikipedia.org/wiki/Netscape
I think there is a very direct parallel to the current situation with Zoom vs. the world. Web browsers became a commodity and Microsoft won because they bundled it with their software and made it so easy that they eventually won the war (at least on the PC side). I still use a Mac, and now surf the web on Safari - mainly because it is easy. Is “surf the web” still a phrase? Haha
My personal experience is that there isn’t much difference between Webex, Zoom, and Skype, but I have only used them for very simply meetings with few attendees. At least on a Mac they’re all pretty simple and straight-forward. And I haven’t paid for any of them.
DT
Long ZM
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Hi DT,
Yes, and Safari wins on Mac in part because it comes with the Mac. I agree, the browser wars were interesting. If I may ask, why are you long ZM when you evidently see the parallels I’m referring to?
FWIW, I did have a much better experience with Zoom recently (telemedicine) than I ever had with Skype. Of course we were “skyping” with my in-laws overseas, but we always had problems with the audio being choppy and the connection dropping. Not impressed with Skype. Zoom (locally) was stable and clear.
1poorguy
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We can debate the competitive merits of ZM and risk of competition ad nauseam but in the end, there’s no way to confidently determine what will go through the collective minds of the paying customers. We did this with MDB, AYX, NVDA, etc. To some extent Google, Microsoft, Facebook, and Apple have to offer some form of these products for free just to keep up just like the cloud services offer free versions of databases and search utilities. Like Saul always says about stocks he isn’t invested in, it doesn’t really matter if others do well. The important part is that the companies you own are doing well.
So maybe Google will grab some users, Teams will grow, WebEx will grow. What matters is how fast Zoom is growing revenues. Maybe if they decide to go with the ad supported route or become a social platform then MAU and DAU numbers will matter as well.
I have no idea what effect of 300 million users will be. One paying customer could bring in hundreds or thousands of “users”. But those users might eventually become paying customers as well. Supporting those free users might be considered the cost of the massive publicity they’ve been getting. Zoom is being advertised by sports teams to connect with fans, being spoofed on SNL, I’ve even seen people posting videos saying it is a “Zoom” when it says “WebEx” in the corner.
All that is promising but I can’t confidently say that I know what will happen. What I know has happened is that they were already growing tremendously and will grow even more due to the pandemic, so I’ll just hold on until I see what actually happened.
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Hi all,
Very first post here, thanks Saul and everyone here for all the wonderful investing lessons that you’ve been giving out. After reading the news,I just try to verify what does it mean from Google by giving out for free, I downloaded the Google Meet app, after signing in using my gmail account, only found out that I can only participate calls, If I want to host, I need to pay for G Suite membership (a collaboration tools for companies, pricing from $6/user). So basically, Google just made this Google Meet for free just for G suite subscribers who are paying at least $6/month (to host up to 100 participants, while with Zoom, you can basically do the same thing for free. Sorry for my English, and please correct me if I am wrong here. Thanks!
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I can’t confidently say that I know what will happen. What I know has happened is that they were already growing tremendously and will grow even more due to the pandemic, so I’ll just hold on until I see what actually happened.
Hi IRdoc,
That’s exactly what I am thinking. They were growing at about 80% before the pandemic, and now they have 30 times as many daily users as they had at the end of January (300M to 10M). But this quarter won’t be compared against the Jan quarter. It will be compared with the April quarter a year ago, when maybe they had 6M (rememberer they were growing well over 80% back then). So they probably have 50 times as many users as in the year ago quarter. Now I’m not looking for 50 times the revenue, or even 25 times the revenue, or even 15 times the revenue, but I could sure imagine three, four, five, or six times the revenue (revenue up 200%, 300%, 400% or 500%, year-over-year). Can’t you!
Saul
A link to the Knowledgebase for this board is in the Announcements panel that is on the right side of every page on this board.
For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”
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Unlike FB, I see Google being a true threat to Zoom’s future growth. Here is a description of G Suite membership:
“G Suite offers three main plans: Basic, which costs $6/user/month and comes with 30GB of Google Drive storage; Business, which costs $12/user/month and provides unlimited storage and extra security and admin controls; and Enterprise, with unlimited storage and advanced controls, which costs $25/user/month”.
For video-conferencing, G Suite is comparable to Zoom’s entry level membership, Pro, costing $14.99. With much less money, G Suite offers additional 30 GB storage. If you owns a small business, which one will you choose?
On the other hand, Zoom may still thrive even with Google as a fierce competitor. Today’s Zoom reminds me of last year’s Netflix when NFLX’s business was threatened by CNBC, Apple, and especially Disney. But look at where NFLX is today.
So, I agree with IRdoc and Saul. Wait until the up-coming ER to see what happens.
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Free Google Meet will be limited to 60 min meetings and 100 people. ZM free limits to 40 mins and 100 people. They’re basically replicating Zoom’s free tier plus 20 mins. The version targeted for business / enterprise, which is the only place either company makes any money is still chargeable.
https://www.cnn.com/2020/04/29/tech/google-meet-free/index.h…
I don’t see any new threat to ZM in this news piece.
And the reason you can’t use it for free now if you’ve downloaded the app today is because it hasn’t rolled out yet.
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Web browsers became a commodity and Microsoft won because they bundled it with their software and made it so easy that they eventually won the war (at least on the PC side).
Errr, have you looked lately at the market share of Edge? It is around 6%. Chrome is 68%.
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Remember when Netflix just rented DVD’s by mail? Common thought at the time was that Blockbuster could add that service and just use its might to drive Netflix out of business. How’d that work out? I think I’ll just wait for ZM to report their quarter before even thinking about drawing any conclusions.
Don
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‘Google Starts Giving Away Meet Video Chat to Catch Up to Zoom’
As I’ve mentioned before. I think real video conferencing money isn’t in a bunch of individual licenses at companies. These are the foot in the door sales. They could also switch at any time.
The real money is when big companies configure their dozens (or hundreds) meeting rooms with big monitors, decent cameras and audio conferencing microphones and speakers that is all setup for Zoom (or MS Teams, or Webex or whatever). Once a company does all the mechanical/electrical work and the IT configuration (calendar and room reservations) they are going to keep paying the ~$50/mon/room for years and years.
And the company also pays for licenses for each seat.
Mike
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