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Zoom to buy cloud software provider Five9 in $15 billion deal

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Zoom Video Communications Inc. has agreed to buy cloud software provider Five9 Inc. in an all-stock deal worth about $14.7 billion to target business clients looking to boost customer engagement, it said on Sunday.

The teleconferencing services provider has become a household name and investor favorite in the year since the coronavirus pandemic, as businesses and schools adopted its services to hold virtual classes, office meets and socialize.

The San Jose, California-based company is now shifting focus to its two-year-old cloud-calling product Zoom Phone and conference-hosting product Zoom Rooms as bigger players Facebook and Alphabet’s Google amp up their video products.

“The acquisition is expected to help enhance Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity by adding the $24-billion contact center market,” Zoom said in a statement.

The acquisition will complement Zoom Phone service, an alternative to legacy phone offerings, by adding Five9’s business customers and combining its contact center software to optimize customer interactions across channels, it added.

Five9 will become an operating unit of Zoom and its chief executive, Rowan Trollope, will become a president of the company, staying on as chief of the unit after the deal, which is expected to close in the first half of 2022, it said.

Under the pact, approved by the boards of both companies, Five9 stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9, it added.

Based on the July 16 closing share price of Zoom Class A common stock, this represents a price of $200.28 for each share of Five9 common stock, and an implied deal value of about $14.7 billion.

Shares in Five9 finished up 0.6 percent at $177.60 on Friday, while Zoom rose 1.4 percent at $361.97, valuing the company at around $106 billion.

Zoom rose 45 percent over the past year, as conferencing platforms, which also include Cisco Systems Inc’s Webex and Microsoft Teams, have seen a surge in usage due to the coronavirus pandemic that has spurred a seismic shift to online working, learning and socializing.

Global spending on cloud-based conferencing is forecast to reach $5.41 billion this year, up from $5.02 billion in 2020, according to tech consultancy Gartner. It does not track market share, but analysts cite Zoom and Cisco as the leaders.

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2018 change to Facebook algorithm caused spread of ‘misinformation, toxicity, violent content’

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An algorithm change made by Facebook in 2018 to prioritize reshared material instead led to the spread of “misinformation, toxicity, and violent content,” leaked internal documents have revealed.

That year, Facebook’s chief executive officer, Mark Zuckerberg, said the alteration had been carried out in a bid to strengthen bonds between platform users, particularly family and friends, and to improve their wellbeing.

However, according to the leaked documents that were made public on Wednesday, the modification backfired, turning the social networking platform into an angrier place by rewarding outrage and sensationalism.

The new algorithm produced high levels of comments and reactions that translated into success on Facebook but had a highly negative impact.

Highlighting the issue, a team of data scientists said: “Our approach has had unhealthy side effects on important slices of public content, such as politics and news.”

They concluded that the new algorithm’s heavy weighting of reshared material in its news feed made the angry voices louder.

“Misinformation, toxicity, and violent content are inordinately prevalent among reshares,” the researchers added in internal memos.

The alteration had been intended to encourage engagement and original posting in a way that the algorithm would reward posts with more comments and emotion emojis, which were viewed as more meaningful than likes.

Zuckerberg was reportedly warned about the problem in April 2020 but kept the algorithm in place regardless.

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TikTok’s lead EU regulator opens two data privacy probes

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TikTok’s lead data privacy regulator in the European Union has opened two inquiries into the Chinese-owned short-video platform related to the processing of children’s personal data and transfers of personal data to China.

Ireland’s Data Protection Commission, which is lead EU regulator for many of the world’s top Internet firms due to the location of their regional headquarters in Ireland, is allowed to impose fines of up to 4 percent of global revenue.

TikTok in August announced stricter privacy controls for teenagers, seeking to address criticism that it has failed to protect children from hidden advertising and inappropriate content.

Owned by China’s ByteDance, TikTok has grown rapidly around the world, particularly among teenagers.

The first of the probes relates “to the processing of personal data in the context of platform settings for users under age 18 and age verification measures for persons under 13,” the Data Protection Commission said in a statement.

The second probe will focus on transfers by TikTok of personal data to China and whether the company complies with EU data law in its transfers of personal data to countries outside the bloc, the statement said.

A spokesperson for TikTok said it had implemented extensive policies and controls to safeguard user data and relies on approved methods for data being transferred from Europe, such as standard contractual clauses.

“The privacy and safety of the TikTok community, particularly our youngest members, is our highest priority,” the spokesperson said.

Ireland’s data watchdog earlier this month levied a record 225 million euro ($265.64 million) fine on Facebook’s WhatsApp under the EU’s 2018 General Data Protection Regulation law (GDPR).

But the watchdog has faced criticism from other European regulators at the speed of its inquiries and the severeness of its sanctions.

The Irish regulator had 27 international inquiries in progress at the end of last year, including 14 into Facebook and its subsidiaries.

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TikTok enhances mental wellbeing features for World Suicide Prevention Month

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TikTok has announced new features to safeguard the mental well-being of users on the app in honor of World Suicide Prevention Month.

TikTok, like other social media platforms, has come under fire for a perceived weak response to mental health issues.

TikTok has announced new features to safeguard the mental well-being of users on the app in honor of World Suicide Prevention Month. (Screenshot)

Earlier this year, the AFP reported that a Pakistani teenager died while pretending to kill himself as his friends recorded a TikTok video. In January, another Pakistani teenager was killed after being hit by a train and last year, a security guard died while playing with his rifle while making a clip.

In September 2020, there was also a suicide video circulating on the platform that was disguised along with clips from other videos. The video originally appeared on Facebook and was shared on other platforms including Twitter and Instagram.

At the time, TikTok issued a warning stating that it is working to remove and ban accounts that repeatedly try to upload clips.

TikTok has announced new features to safeguard the mental well-being of users on the app in honor of World Suicide Prevention Month. (Screenshot)

“While we don’t allow content that promotes, glorifies or normalizes suicide, self-harm or eating disorders, we do support people who choose to share their experiences to raise awareness, help others who might be struggling and find support among our community,” Tara Wadhwa, director of policy, TikTok US, said in a recent blog post.

This month, TikTok is bolstering its efforts to prevent this content on the platform as well as providing more support and guidance to users who are struggling with mental health issues.

The app will now direct users to a local helpline and provide educational content linking to resources when they search keywords related to self-harm and suicide.

TikTok has also created additional resources including well-being guides developed with mental health foundations such as the International Association for Suicide Prevention and a dedicated guide for eating disorders, which was developed alongside the National Eating Disorders Association, National Eating Disorder Information Centre, Butterfly Foundation, and Bodywhy. The guides are available on the platform’s Safety Centre.

TikTok will also issue permanent public service announcements on certain hashtags such as #whatIeatinaday to increase awareness and provide support to the community. This will be accompanied by stronger content warnings, which include updated labels for potentially upsetting content, masking search results with a warning layer.

The app has dedicated one week this month to drive conversation and activities around mental health. The platform will highlight content created by community members and experts as well as additional resources to further support users.

It will be available when users search for related terms, giving users the chance to opt-in to view the content.

“Our policies have always aimed to prioritize people who may be struggling, and we currently provide access to expert emotional help from global leaders in the field, alongside approved government resources. This is a continuously evolving process, and we will build on our existing array of wellbeing guides wherever possible, through insightful, verified information,” said Farah Tukan, a public policy manager at TikTok.

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