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After the Scrapped Five9 Acquisition, Zoom Is Still Going After Cloud Contact Centers

By Nicholas Rossolillo and Brian Withers - Oct 21, 2021 at 6:30AM

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Zoom was already building its own contact center solution even prior to the Five9 deal getting shot down.

Though Zoom Video Communications( ZM 3.07% ) bid to acquire cloud contact center company Five9 ( FIVN 1.43% ) has now been scrapped, Zoom still has aspirations in this area of the cloud communications sector. Its announcement on the same day the deal with Five9 was terminated is telling. contributors Brian Withers and Toby Bordelon discuss why these plans were likely already in the works even before the purchase of Five9 was called off, in this Motley Fool Live segment from "Wheeling & Dealing" recorded Oct. 15.

Brian Withers: Let's go to the announcement here, which we all know the end of the story, but I think the wording here is important. Zoom announces termination of merger agreement with Five9, and it was interesting, you'll see this. It looks like this announcement to me anyway was pre-prepared. [laughs] This was not a quick "Oh crap, they voted it down, we have to send that other announcement." No. This was a well-thought-out [laughs] approved quite in advance I imagine, if the merger doesn't go through, we're going to have to send this announcement out. They said, "Hey, this announcement, they didn't get the required shareholder vote, so we agreed to terminate the merger agreement."

Eric Yuan has this nice quote, says, "Hey, we were excited about the benefits," and it talks about the contact center remains a strategic priority and we remain confident in our ability to capture its growth potential. By the way, we announced this Zoom Video Engagement Center. [laughs] Our cloud-based contact center solution, which will just so happen to launch [laughs] in early '22 when the deal was going to close. [laughs]

Toby Bordelon: Yeah.

Withers: That's odd.

Bordelon: There's certainly some reading between the lines you can do here in terms of how excited Zoom was about actually going through with this deal by that time. They rethink it today, I don't know.

Withers: If Eric Yuan is excited about this video engagement center, which actually it looks pretty cool, and he says, "Video engagement center, we have flexible, easy-to-use solution that connects businesses to their customers, and we're building this service with the same scalability, trusted architecture, yadda, yadda, yadda." Wait a minute. We got something that we just built and we're also paying 15 billion or now 10 billion, the furthest company who also does it. What do we do?

Bordelon: Yeah.

Withers: The next sentence is a little bit telltale and I think, Toby, you clicked on it when we were doing a three-minute stock update earlier in the week. Let's see. We're building the solution. Here it is. We also plan to maintain our valued existing contact center partnerships with companies like Five9, Genesis, NICE ( NICE 1.45% ) inContact, Talkdesk, and Twilio ( TWLO 3.58% ).

Bordelon: You wonder if they got any phone calls this deal was announced from Twilio [laughs] for instance. They are like, "What? Do we not have a deal anymore when this closes? Are you going to be competing directly with us after we've been a good partner to you in the space?" That's not cool. Who knows? There could have been some push back. There's so many things that are going to happen here.

Withers: I would have loved to be in a fly on the wall when the Five9 CEO calls Eric Yuan and goes, "Hey, [laughs] I don't think this deal is going to go through. "Okay, thanks."

Bordelon: [laughs] "What are we going to do? Let's move on."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
$194.86 (3.07%) $5.80
Five9, Inc. Stock Quote
Five9, Inc.
$142.05 (1.43%) $2.00
NICE Ltd. Stock Quote
$301.86 (1.45%) $4.31
Twilio Inc. Stock Quote
Twilio Inc.
$274.81 (3.58%) $9.50

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