Why Google should buy DropboxComment on this story
Washington - Siri and I don’t talk much these days. Which is odd, because she probably knows more about me than anyone else in my life. She knows where I’ve been, where I am, and where I’m going. She knows how many books I own, and which ones I’ve actually read. She knows whom I talk to every day, and what I say.
By all accounts, I should be outsourcing most of my daily life to Siri. Apple claims that “Siri is so easy to use and does so much, you’ll keep finding more and more ways to use it’.
Note it, not her; perhaps Apple found the premise of Her, about a more-human-than-human operating system, to be unsettling. But there’s no need to fear that I’ll fall in love with my digital assistant; at the moment, I barely like her. She’s useful for sending texts or e-mails while I’m on the road, and her voice recognition capabilities are remarkable. Even still, she’s not that bright – she can’t really do anything I can’t, despite the resources (and my data) at her theoretical disposal.
Google could integrate Dropbox into its platform practically overnight and make billions of dollars off related services.
This should scare the good people in Cupertino (home of Apple), and it should give pause to the folks in Mountain View (home of Google). If anyone should be finding “more and more ways” to use Siri, I should. I am an unabashed Apple fanboy. I find nothing weird about anthropomorphising an operating system. And if everyone’s excited about the Internet of Things, I’m even more excited for the Internet of Me: the possibility of automating, operating, optimising, and organising every detail of my life. I don’t want the NSA or advertisers rummaging through my data. But I’m happy to let someone do it, provided they find patterns within it that I can use.
As I upload more and more of my documents, emails, and pictures to the cloud, Siri – or at least the OS she’s the emissary of – should find “more and more” ways to mine them. Siri could help me plan for meetings. She could help kids do their homework. She could fact-check my articles. She could help me find the perfect birthday gifts. She could keep me up to date on work-related tasks and conversational threads. I’d gladly subscribe, perhaps paying in the double-digits per month, to a savvier Siri.
If only she knew where to start. As it happens, I’m one of the 200 million users who’ve stashed things away on Dropbox. I store my working life on Dropbox: presentations, spreadsheets, rough drafts, and so on. Increasingly, I also store my personal life on Dropbox: photos, home movies, backup files, and e-books.
At first blush, it seems counterintuitive that we’d be storing so much on a service unconnected to our mobile devices. But that’s Dropbox’s secret weapon: It’s platform-agnostic. For all the beauty, simplicity, and elegance of iOS and Android, those operating systems are black boxes to everyday consumers.
Most users probably don’t transfer files onto and off of their tablets and smartphones using anything other than the onboard app stores. This limits what users can put on those devices and, accordingly, it limits what users can do with them.
As Dropbox acquires more of those files, it acquires all of their potential use cases. It just so happens that all the files not on our tablets and phones are among our most important – for some of us, they’re the only reason we still keep laptops at all.
So far, Apple’s iCloud has access to the lighter side of our lives, and Dropbox has access to the serious side. That balance may tip, and not in iCloud’s favour. Dropbox is muscling in on Apple’s turf with Carousel, a beautiful photo-management app with the potential to do a lot more. Recently it announced the purchase of Loom, an Apple-centric photo and video storage service, and Hackpad, a collaborative document startup. The company is moving swiftly to perform an end-run around Apple’s and Google’s mobile cloud offerings.
Steve Jobs realised that Dropbox would one day pose a threat to his designs on the cloud; he allegedly made a play for the company in 2009. Drew Houston, Dropbox’s CEO, declined the offer. Today Houston’s company is valued at over $10-billion. Apple could still afford to buy it, and it should probably try.
But my money’s on Google. Google, unlike Apple, could integrate Dropbox into its platform practically overnight – and make billions of dollars off Dropbox-related services. Google, unlike Apple, faces threats from Dropbox on all sides of its business.
And Dropbox is starting to look very Google-y. Back in February, Houston piqued curiosity by hiring Dennis Woodside, the former CEO of Motorola, away from Google. During his brief stay at Google, Woodside ran ad sales in the Americas; Google’s top brass doesn’t hand over positions like that to just anybody. Woodside isn’t the first signal of Dropbox’s ambitions in mobile advertising: About a year ago, Dropbox bought Endorse, a mobile coupon startup. It bought TapEngage, a tablet-optimised advertising service, in 2012. Those acquisitions went largely unheralded, but in retrospect, they’re starting to form a pattern.
A wide-reaching ownership over 200 million users’ most treasured digital artifacts provides Dropbox a trove of information that’s in some ways more useful than Google’s. Web search will remain a valuable market for many years to come. But search within one’s personal web – or at least informed by it – might be even more valuable.
For all its potential, Dropbox isn’t a search company. It may be gobbling up a lot of the world’s most useful information – but unlike Google, it’s not (yet) adept at organising that information. Its acquisition history suggests ambitions, however inchoate, in the advertising space. Google, meanwhile, wrote the book on digital advertising.
It also has the team, infrastructure, technical depth, and resources to power a massive, Dropbox-based ad platform. With Dropbox at its disposal, Google could move further into predictive and need-state-based advertising. It could also build a competitive hedge against Facebook’s segmentation-based ad platform.
On its own, Dropbox might take years to reverse-engineer Google, but it’s squirreling away all the data it needs to do so. The Google it might build – the Internet of You, and all the services you’ll need for it – will be increasingly central to our cloud-powered, mobile lives. The learning curve to build it will be steep and perilous. It’s a tall mountain to climb, but the view from the top is spectacular. – Slate / The Washington Post News Service
‘But Google Drive does the exact same thing!’
Making a statement like “Google should acquire Dropbox”, no matter what arguments I can marshal in its defence, is bound to raise some eyebrows. Since I wrote the article on the left, I’ve received some excellent feedback from online readers. Some of it has been positive, some sceptical, and almost all of it has been insightful and constructive. And it’s been substantial enough to warrant a follow-up discussion.
I’d like to address some of the feedback I’ve received so far. Here are the three most common lines of commentary.
Why should Google buy Dropbox when Google Drive does the exact same thing?
Good question! I’m a Google Drive user, and I enjoy the product immensely. I get even more use out of Google Docs. Functionally speaking, there is little difference between Google Drive and Dropbox, and yet I use both. So do millions of people – not to mention the millions more who use Dropbox and don’t use Google Drive.
The Internet of Me is one of the largest yet-to-be-tapped service markets in existence.
In fact, it’s because Drive and Dropbox are so similar that Google should buy Dropbox. The products are complementary.
Whether Google absorbs Dropbox into Drive, keeps it around as a stand-alone product, or replaces Drive with Dropbox altogether, it will have an immediate use for Dropbox. Dropbox will make Google stronger: both by bringing in new users from Dropbox’s ever-increasing share of the cloud storage market and by enhancing Google’s capabilities in the cloud storage space.
By a similar token, I think Tesla should buy any hypothetical electric car company that invents a markedly better car battery. Battery technology is central to Tesla’s competitive advantages in the marketplace, and it should do everything it can to be the best at what it specialises in. It should do so even if that means buying out ostensible competitors rather than attempting to outcompete them. Doing so will make its own products better, and it can afford to take the “buy” side of the “build vs buy” conundrum when buying is more economically efficient.
Google is in the same position. Cloud storage – and the attendant services to be sold on top of it – will be central to Google’s success in the next five to 10 years. We’re now looking at the emergence of the Internet of Me: the ecosystem of all the things in my daily life and all the opportunities to derive value from them.
Google’s guiding mission is to be the organising force of the Internet, no matter what form it takes. So if the Internet of Me is at all valuable – and I believe it is one of the largest yet-to-be-tapped service markets in existence – Google will want to take every possible measure to retain its centrality in that Internet.
I don’t want anyone mining my personal files, least of all for advertising purposes.
This is a fair point. Finding ways to mine user data responsibly and effectively while preserving privacy is a serious barrier to building an Internet of Me. The path is filled with potential pitfalls and dangerous turns.
But the history of Web technology products is one of trade-offs: of data provided in exchange for services rendered. Consumers consider the trade-off acceptable when the value added outweighs the burden of the intrusions. Over time, they stop thinking of it as much of a trade-off at all.
Take location data, for example. Allowing a company to track and use one’s location used to be a matter of some controversy. Today, few users of Yelp, Google Maps, or even the latest online dating services would argue that they’re not receiving value in exchange for their location data.
Privacy is a precious thing, of course, and it’s worth fighting for. Companies planning to do anything with their users’ data should make their intentions clear, obtain consent in a transparent manner, and provide an easy opt-out choice.
Google, for its part, serves you advertisements based on categories and keywords it finds in your Gmail inbox. The very idea of this sort of advertising, taken at face value, seems intrusive. And in the hands of a less responsible company, providing no apparent value for the intrusion, it would be. But Google is very clear that the service is automated and blind. As it states: “No humans read your e-mail or Google Account information in order to show you advertisements or related information.” Google also provides an opt-out choice, which you can find in its “Ad Settings”.
Why would Dropbox even let Google buy it? Didn’t they turn down Apple?
This is, give or take, the $10-billion question. Dropbox founder and CEO Drew Houston is an ambitious person. If the rumors are true, he turned down an offer from Steve Jobs and has possibly turned down inquiries from Google over the past few years. It’s clear that Houston wants to take Dropbox all the way to the top. He’d rather become the next Google than sell out to Google.
I have no reason to believe that Houston, or Dropbox’s board, would sell to Google (or to anyone else, for that matter), barring an extraordinary acquisition price, perhaps coupled with some extraordinary terms – terms such as, say, catapulting Houston and his team to the executive ranks at Google itself. And so the question really hinges on Drew Houston’s weighing of the expected value of his company’s many options.
Whatever path Houston and Dropbox take, however, I’m excited. Few technology companies in the past half-decade have emerged with serious potential to challenge Google, Facebook, and the other giants for supremacy over significant portions of the Internet ecosystem.
In Dropbox, we’re seeing a new player take the field – win or lose, I’m watching that game. – Slate / The Washington Post News Service