Verizon to pay hundreds of millions for San Jose videoconferencing company

Verizon Communications Inc. has agreed to buy videoconferencing company Blue Jeans Network Inc. at a price that is reportedly far less than it was previously figured to be worth. The Wall Street Journal cited an unnamed source familiar with the terms who said the telecom giant is paying less than $500 million for the San Jose-based rival of Zoom Video Communications Inc. Blue Jeans, which moved its headquarters to Santana Row in San Jose from Mountain View last year, was valued at more than $700 million when it raised funding in 2015, according to PitchBook Data. Its investors include Norwest Venture Partners, New Enterprise Associates, Accel, Battery Ventures and Wing Venture Partners.

Blue Jeans focuses on business videoconferencing, which has picked up tremendously as unprecedented numbers of people are working from home due to the coronavirus pandemic and events have moved onto the web that had been scheduled to be live.

The company’s brand-named BlueJeans service has 15,000 customers. 

It isn’t available free to consumers like Zoom is, which has over 13 million users, but it also hasn’t had the problem of “Zoombombing,” in which bad actors share hate speech or pornography after getting access:

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Security is one of the features Verizon emphasized among the reason why it is buying Blue Jeans. Tami Erwin, head of Verizon’s business unit, said the deal gives Verizon a way to help its corporate customers build telemedicine, remote learning and virtual training services. 

“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,” Erwin said in the sale announcement.

Verizon said it expects the deal to close in the second quarter, with BlueJeans founders and key management team joining along with work force of about 500 employees.

“The combination of BlueJeans’ world class enterprise video collaboration platform and trusted brand with Verizon Business’ next generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers,” Blue Jeans CEO Quentin Gallivan said in the deal announcement.