As social distancing becomes the new normal amind the COVID-19 pandemic, video calls have quickly gained popularity in workplaces, educational institutes, and in homes to keep organizations running and help people stay connected with their loved ones. Zoom - a popular video chatting app, has seen a massive rise in usage in the past few months and is now worth more than some of the most famous airlines in the world.
Zoom's Market Capitalization
Google trends data on Zoom has shown that Zoom's market capitalization has jumped to $48.8 billion, what's interesting is that it only had revenues of $623 million last year. So what makes Zoom stand out from its competition? And what has made the app so popular in the business culture?
According to analysts, business users are attracted to the app because of its user-friendly interface and user experience. Another attractive feature of the app is its ability to support up to 100 participants in a single call. Apart from businesses, it has seen a massive surge in use among educators for the purpose of online learning.
There has also been a rise in the number of participants in the past few months, it is interesting to note that it only had 10 million users in December 2019, and in April 2020 it had a whopping 300 million users.
The Decline in the Airline Industry
The airline industry has suffered drastically due to both domestic and international flight restrictions with many airlines laying off employees and cutting down executive pay to stay stable The revenues of the world's top airlines have dropped in total value by 62% from the start of February. Southwest Airlines dropped from $28.440 B to $14.04B, Delta fell from $35.680 B to $12.30 B while American Airlines faced a decline from $11.490B to $3.886 B. It is still uncertain when air travel will go back to normal and even big investors like Warren Buffet have stopped investing in airline stocks.
So What Lies Ahead?
So what does the future hold for Zoom, the app's success has been mainly due to the current circumstances but what will happen when things start to change? Many investors have had this question on their minds as the app's results will be released in a month. It is also important to note that all hasn't been well for the app, there have reportedly been several incidents where meetings were hacked which raises many questions about the app's security. But the company has remained steadfast while providing support to counter the issue.
