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Verizon is buying BlueJeans, one of Zoom’s video conferencing rivals

The deal is reportedly worth around $500 million

Verizon announced on Thursday that it has entered into an agreement to acquire videoconferencing and event platform BlueJeans Network. The companies did not announce the terms of the deal in a press release, but The Wall Street Journal reports that Verizon will pay less than $500 million for the company, which has some 15,000 business clients.

The move comes as rival videoconferencing app Zoom has soared in popularity as more people work from home. But Zoom has been faced with continued security issues, including widespread instances of “Zoombombing,” where uninvited guests crash a Zoom meeting. It updated its iOS app late last month to remove code that sent device data to Facebook. Zoom also had to rewrite parts of its privacy policy after it was discovered that users’ personal information could be used to target ads.

Unlike Zoom and Microsoft’s Skype video calling service, BlueJeans doesn’t have a free version and is primarily aimed at business users, the Journal notes.

“BlueJeans will be deeply integrated into Verizon’s 5G product roadmap, providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning and field service work,” Verizon said in a statement announcing the deal.

Verizon CEO Hans Vestberg said on CNBC on Thursday that Verizon has been looking BlueJeans for about a year, and he thinks his company’s distribution will allow BluJeans to better compete with Zoom and others. Vestberg reiterated that BlueJeans will be built into Verizon’s 5G network. “Ultimately videoconferencing and video will be enormously important in 5G,” he said.

But unlike Zoom, Verizon is also a national internet service provider. Its purchase of BlueJeans opens the door to potential net neutrality concerns of Verizon prioritizing its own videoconferencing software for Fios customers over competitors like Zoom and Microsoft Teams.

BlueJeans was founded in 2009. In December 2019, CEO Quentin Gallivan wrote in a blog post that the company “will become profitable and operating cash flow positive over the next few months.” Like Zoom, BlueJeans has seen its usage increase sharply over the past month. BlueJeans’ founders and its management team will join Verizon once the deal closes, which is expected to happen in the second quarter of this year.