Verizon is buying the video conferencing platform BlueJeans as workers increasingly rely on web tools to connect during the coronavirus pandemic, the company announced Thursday.
Verizon will pay about $400 million in the deal, CNBC's David Faber reported. BlueJeans has more than 15,000 customers, Verizon CEO Hans Vestberg said in an interview with Faber shortly after the deal was announced.
Many enterprise tools like Zoom, Slack and Microsoft Teams have seen an uptick in usage as more American regions have been instructed to stay at home to tamp down the spread of the virus. The acquisition shows Verizon is looking to be a part of that movement as businesses still struggle to reopen offices.
"As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools," Verizon Business CEO Tami Erwin said in a statement.
Zoom, which quickly became one of the most popular conferencing tools once stay-at-home orders set in, has recently stumbled into some speed bumps, creating an opening for rivals. After privacy and security issues with Zoom came to light, some organizations ordered their workers not to use it, including the New York City Department of Education.
"We see an opportunity with our distribution channel," Vestberg said of competing with companies like Zoom. He added that BlueJeans will be built into the company's 5G offering.
Including the conferencing tool in its 5G network could help Verizon compete with other carriers, including the newly combined T-Mobile and Sprint. A judge ruled in February that the acquisition could go through after a group of states challenged the merger as anticompetitive, whittling down the number of major American telecommunications companies from four to three. The companies argued their combination would help them advance plans to build out 5G networks.
"We feel really good about our assets," Vestberg told CNBC. "I feel that we are in a very very good spot with 5G."
Verizon said BlueJeans' founders and management team will join the company to continue the platform's growth and its employees will also become part of Verizon. Verizon said it expects the deal to close in the second quarter of the year.
Vestberg also discussed what it will take for companies to return to offices around the world following a conference call of CEOs organized by the White House. Vestberg said much of the call discussed testing and other measures that would be helpful to bring Americans back to work.
"It has to be a staggered coming back to the economy," Vestberg said.