Of all the ways Zoom Video Communications could squeeze more revenue out of its wildly popular videoconferencing service, the company’s founder and CEO Eric Yuan made it clear there was one thing he didn’t want to do: sell advertising.
Yuan voiced his opposition to Zoom ads in meetings with employees who suggested the idea shortly before the company’s initial public offering in April 2019 and then again in March 2020 at the outset of pandemic-related lockdowns, according to two people who heard him express those sentiments. One of those people said Yuan felt putting ads in Zoom would be “cheap and unprofessional” and dismissed the idea on both occasions.
That was then. Earlier this month, Zoom announced that it would start showing web advertisements to users of a free tier of its service, which became a lifeline to millions of people during the pandemic who suddenly depended on it to connect with work, family and friends. But while that surge in usage made Zoom into a household name, it also brought with it soaring costs for running the technical underpinnings of the videoconferencing service. While Zoom doesn’t disclose how much it pays to support the free version of its service, a person who works at Zoom said the tab is well over $100 million a year.