Zoom 'to strengthen encryption for paying customers' as its stock soars

The company will reportedly not tighten security for users with free accounts despite software vulnerabilities

People are relying on Zoom for personal and professional calls across the globe. Bloomberg

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

Zoom previewed its plans with civil liberties groups and campaigners against child-sex abuse on Thursday, the report said. The plans were subject to change and it was unclear which non-profit organisations would qualify for such heightened security for video conferences.

Zoom has experienced a surge in usage of its services during the coronavirus shutdowns, but has come under increasing pressure because of encryption vulnerabilities. The company was after accusations it hid flaws in its app, and there have been instances where online trolls disrupted 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.

Shares in San Jose, California-based Zoom 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 55 times estimated revenue compared with an average of seven times for software and services stocks in the S&P 500.

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