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Warren Buffett’s famous line that “only when the tide goes out do you discover who’s been swimming naked” has been coming up a lot lately. He was referring to tough times exposing investors who didn’t particularly know what they were doing. I’ve been hearing it in terms of crises focusing attention in organizations on who produces compared with who complains about having to produce.
I thought about the notion of what shows under a bright light while reading Michal Lev-Ram’s thorough and colorful feature about Zoom in the new issue of Fortune, which Aaron mentioned last week. I happen to know Lev-Ram became interested in Zoom back when the San Jose, Calif., company merely was lauded for having had a successful 2019 IPO at a time higher-profile deals had sputtered. Zoom was an investment darling a few months ago; it was not a global phenomenon.
Now, though we all know about Zoom, most of us haven’t paid the company a dime. Not only had Zoom not set out to be a consumer favorite, evidence is growing that hosting Zoomtail hours, birthday parties, and Passover seders isn’t a particularly good business for Zoom. The company doesn’t break out its paid versus non-paid users. In other words, it’s tough right now to know how Zoom’s business has benefited from its quick jump from 10 million to 200 million daily users.
More users are nearly always better, provided a company can serve them. As Lev-Ram writes, Zoom’s laggard competitors certainly would like to pick up its overflow. I was caught off guard by the performance of RingCentral, for example, whose stock has done about as well as Zoom’s over the past year and jumped 7% Monday on a down day for the market. (Fortune uses RingCentral internally to communicate.)
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Zoom’s current quarter ends in a couple of weeks, and some time after that we’ll see the true impact of the pandemic on its business. We won’t have to wait that long to find out if more people are watching Netflix because they are stuck at home or if they’re cancelling the service because they are strapped for cash. Netflix reports earnings today.
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Save the date
Tomorrow at 10:00 a.m. Pacific/1:00 p.m. Eastern I’m holding a 40-minute livestreamed conversation with Fortune’s Erika Fry about her article, Saving a City: How Seattle’s corporate giants banded together to flatten the curve. We’ll do some comparing and contrasting with San Francisco, another city that has handled the pandemic well.
I’ll take your live questions for either one of us via chat. Register here to join the free call.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Itsy bitsy teenie weenie yellow polka dot bikini. On Wall Street, it's also time to ponder Buffett's adage about the tide going out. The first of the tech giants reported on Monday and was not naked, but perhaps a bit underdressed. IBM said its first quarter revenue slipped 3% to $17.6 billion and new CEO Arvind Krishna withdrew the company's annual forecast, adding this scare quote: "For the next few months, we have to be focused on the stability of the business and be sure we preserve our liquidity and balance sheet." IBM's stock price, previously down 10% in 2020, lost another 5% in pre-market trading on Tuesday.
Don't touch that dial. With the streaming wars heating up like never before, Comcastbolstered its offerings by buying Walmart's online TV and movie service Vudu and placing it into NBCUniversal. No purchase price was disclosed for the sale. Apple meanwhile expanded its app store and services to 20 new countries, including Cameroon, Morocco, and Serbia.
If you feel that the bare minimum is enough, then okay. After Google and Apple announced their contact tracing software solution earlier this month, Microsoft on Monday published a list of industry principles for protecting privacy in contact tracing. The principles include collecting a minimal amount of data, minimizing data sharing, and deleting data when no longer needed. Meanwhile, France says it needs Apple to relax some of the privacy rules on iOS for its national contact tracing app to work.
Zoombombing. With millions of workers forced out of their offices due to coronavirus, Fortune and Adobe polled chief information officers about how the remote work experiment is going. Asked what has proved to be the biggest challenge in their companies’ remote work, only 20% of CIOs said hardware and 21% tech tools. The real issue: 53% said it's hardest getting their employees to effectively communicate with one another.
FOOD FOR THOUGHT
Zoom video conferences are all the rage–we've just written two of the last three newsletter essays about the trend. But while much business can get done via online meetings, much is also lost. Author and tech critic Michael Sacasas has a new essay outlining his "theory of Zoom fatigue." It's a fascinating read.
In face-to-face conversation...while our conscious attention is focused on words and their meaning, our fuller perceptive capabilities are engaged in reading the whole environment. In conversation, then, each person becomes a part of a field of communication that includes, but is not limited to verbal expression.
The problem with video-conferencing is that the body is but isn’t there. This means that our minds are at least partly frustrated as they deploy their non-conscious repertoire of perceptive skills. The situation is more like a face-to-face encounter than most any other medium, but, for that very reason, it frustrates us because it is not quite the same. I suppose we might think of it as something like a conversational uncanny valley. The full range of what the mind assumes should be available to it when it perceives a body, simply isn’t there.
ON THE MOVE
European software giant SAPeliminated its co-CEO structure and named Christian Klein as sole CEO. Jennifer Morgan, named co-CEO just in October, will leave the company at the end of the month...Spark Capital general partner Megan Quinn is joining augmented reality gaming companyNiantic. The former Google and Square exec will be COO, reporting to CEO John Hanke, who she worked with at Google...David Thacker is returning to VC firm Greylock Partners, which he left a decade ago, after stints at LinkedIn and Google. He was most recently VP of product management & user experience at Google...And finally, in what seems like the "Departing Google" edition of "On the Move," John Martinis, the company's head of quantum computing hardware, resigned after being reassigned to an advisory role, Wired reports.
IN CASE YOU MISSED IT
Why flying taxi makers are hitting turbulenceBy Jennifer Alsever
Q&A: PayPal CEO Dan Schulman says coronavirus is giving his business ‘a tremendous surge’By Jen Wieczner
Focusing on fevers: Thermal-imaging tech is on the rise. Can it help fight the coronavirus?By Aaron Pressman
Quibi’s launch: What the critics and analysts are saying (so far)By Aric Jenkins
AMD CEO Lisa Su on supercomputing and leading a global company during the coronavirusBy Aaron Pressman
The Coronavirus Economy: A new CEO on transitioning to a remote workforce based in Italy and the U.S.By Rachel King
Crude math: Why $10 oil could be worth less than nothingBy Katherine Dunn
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
I've had a good side gig the past few years as a professional kvetcher about the poor quality of Apple keyboards. Those days appear to be over now. After Apple improved the keyboards on its laptops, it's now out with an amazing deck for the iPad Pro, too. Reviewer John Gruber says the Magic keyboard for iPad Pro is "utterly brilliant" and "feels seamlessly natural." YouTuber Marques Brownlee also likes it, but says he'd still rather just use a laptop. We have one on order at the Pressman household. I'll let you know how it works out.
Aaron Pressman
