Woke up to the news that Facebook has bought 10% stake in Reliance Jio for loose change. Triggered off a chain of wild thoughts… For the past few days the world media, specially media in India, has been going on and on about Zoom Communications being a Chinese company. Zoom is a 100% bonafide American company which was started by an American (of Chinese origin) and is funded by investors from all over the world (excluding Chinese investors). To top that is the fact that Eric Yuan the owner was a major part of Webex which is used as the defacto standard for all business communications. Cisco bought Webex when Eric was still a part of the core team at Webex and then Eric went on to work at Cisco on the same product. Essentially he is someone who is deeply trusted not just by his close circle of colleagues, employers at Cisco and friends but also by exceedingly smart investors who would not give him all those millions without doing a proper analysis of his bona-fides and trusting him. And yet the world is a strange place to be at today where distrust of people can be drummed up by media.
I got a message from a friend a couple of days back, reproducing verbatim:
“Say bye bye to ZOOM. Our Indian App is available ?It’s really good and very quick… no need to create any use id also…
This is locally developed app, Zoom is a Chinese app which gathers all your details.”
As an aside that saynamaste.in app is crap and has next to zero functionality… I put together a better web-conferencing system in under two hours check it out at https://bigblue.netbrix.net if you want to. It is a Zoom clone in all respects, much more secure and the DC is in Bengaluru.
This is the common mans perception of Zoom a bona-fide Silicon valley success story built as a labour of love by a bona-fide American citizen.
On the opposite side of this same spectrum is the purchase of 10% stake in Reliance Jio by Facebook. Again a bona-fide American company with investors in Russia, Hongkong and the middle East much like Zoom (in fact some of these investors overlap). Jio is a pillar a backbone so to speak for India in recent times. It has completely annihilated the competition and is probably going to take over the government telecom firms MTNL/BSNL as well in some time (just a matter of policy decisions which we know are waiting for the right atmosphere). In this scenario Facebook that shares investors with Zoom buying 10% stake in Jio should probably raise security flags, heck it should be raising a lot of security flags.
Come to the second thing that should’ve raised flags. Mark Zuckerberg owns 29.3% of Facebook. So effectively his personal hollding in Reliance Jio works out to roughly 3.3%. Mark Zuckerberg is married to Priscilla Chan. In the event of a divorce (God forbid) Priscilla Chan will end up holding a fourth of the assets that Mark holds (we’re not going to go into the nitty gritties of pre-nups let’s just base it on how Amazon split and MacKenzie now owns 4% of the 16% that Bezos held before the divorce). So effectively Priscilla Chan would end up owning a fourth of Marks ~30% share in FB. How does that translate into holdings in Reliance Joi? Roughly 0.8% of Jio will be owned now by Chan. Why should 0.8% scare anyone? It shouldn’t exactly the same way as 0.8% of Bank of China holding HDFC shouldn’t scare anyone… right? And to think that Chan is not even a Chinese citizen. Granted that she was born to Chinese parents and speaks Cantonese. That’s all the Chinese that there is to her. So how is this scary again? How does this mean that China now owns Jio?
Exactly it does not mean that China owns Jio. The same way as China does not own Zoom Communications. Media will paint a picture which makes you believe one thing for one transaction and another thing for the same person doing a similar transaction. The HongKong based investor is the common link between FB and Zoom US. And yet we in India are painting Zoom US as a Chinese company and FB as a true blue American corporation. Think about it.