Zoom to strengthen encryption for paying customers as its stock soars

Zoom Video Communications plans to strengthen encryption for paying clients and institutions, but not for users with free accounts, according to Reuters which cited the company’s security consultant Alex Stamos.

The company previewed its plans with civil liberties groups and activists against child-sex abuse on Thursday, the report said. Plans are subject to change and it is unclear which non-profit organisations would qualify for such heightened security for video conferences, the report added.

Zoom has seen global usage of its service surge during coronavirus shutdowns, but has come under increasing pressure over vulnerabilities in the app’s software encryption. The company has been sued amid accusations it hid flaws in its app, and has seen cases of online trolls sneak in and disrupt web meetings with profanity.

The maker of video conferencing software is trying to improve security as well as “significantly upgrading their trust and safety”, Mr Stamos said. “The current plan is paid customers plus enterprise accounts where the company knows who they are.”

Zoom’s share price soared to a record on Friday with a rally in the last hour of trading, helping the company close with a market value above $50 billion (Dh183.6bn) for the first time.

The stock rose 9.7 per cent to $179.48, giving Zoom a market value of $50.6bn, bigger than tractor maker Deere & Company and pharmaceutical company Biogen. While there was no clear reason for the steep rise, technology stocks were the best performing group in the S&P 500 Index, and investors may be positioning ahead of Zoom’s earnings report expected on Tuesday.

San Jose, California-based Zoom has gained more than 160 per cent this year as investors bet that soaring usage amid the coronavirus pandemic would translate into long-lasting revenue growth. The stock now trades at an eye-watering 55 times estimated revenue compared with an average of sevent times for software and services stocks in the S&P 500.

Eric Yuan, Zoom’s founder and chief executive, saw his net worth rise by more than $800 million on Friday to $9.3bn, according to the Bloomberg Billionaires Index.