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Jobs offered 'nine-digit price' to buy Dropbox

updated 01:05 pm EDT, Tue October 18, 2011

Claimed Dropbox a 'feature,' not product

Former Apple CEO Steve Jobs offered a massive amount of cash to buy Dropbox, but was rejected, a new Forbes piece reveals. In December 2009, Jobs invited Dropbox founders Drew Houston and Arash Ferdowsi to his office at Apple's Cupertino headquarters. Houston recalls being intimidated. "I mean, Steve friggin' Jobs," he comments. "How do you even prepare for that?"

Houston says that he initially brought out a notebook to demonstrate, but that Jobs waved him off, adding "I know what you do." The CEO then made a pitch for buying out Dropbox, but Houston interrupted, insisting he was trying to build a large firm and wasn't selling, despite considering Jobs a hero and the large sum being offered. The amount of money on the table reached into nine digits, according to Houston.

Jobs is said to have smiled warmly at the same time as he stated that he was going after Dropbox's market. "He said we were a feature, not a product," Houston comments. The next half hour of the meeting is claimed to have revolved around Jobs talking about returning to Apple and not trusting investors, as he drank tea and also fielded questions.

The executive would later offer to meet at Dropbox's San Francisco office. Houston instead suggested meeting in Silicon Valley, which he now explains by saying "Why let the enemy get a taste?" Nothing more was heard from Jobs, however, until June 2011, when he announced iCloud and derided Dropbox as just a partial attempt at solving the question of getting files from every device into one place.

The following day Houston sent a memo to staff reminding them that while Dropbox is "one of the fastest-growing companies in the world," plenty of similar firms have crashed, such as MySpace, Netscape, Palm, and Yahoo.

Dropbox hosts between 2 and 100GB of a person's data on its servers, in plans ranging from free to $20 a month. The key to its success however is the service's associated clients; on a Mac or Windows system users simply copy files into a Dropbox folder, which then automatically uploads the content and keeps it in sync. These files can be accessed remotely not just through other computers but via mobile apps for iOS, Android, BlackBerry and Windows Phone devices.

Forbes remarks that Dropbox is now up to over 50 million users, and should reach $240 million in 2011 revenue despite 96 percent of its subscribers being on the free plan. The company only has 70 workers, and therefore grosses about three times more per person than Google. Sales should at least double in 2012 even without adding any customers, claims Houston.




by MacNN Staff

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Comments

  1. jdsonice@gmail.com

    Joined: Dec 1969

    +5

    Wow!

    I would say that it takes a lot of balls to say to no to Steve Jobs and more importantly to a 9 digit number. Good for Drew Huston. At least he is going after his dream and has demonstrated confidence in his plans. I give him a lot of credit for that. Only time will tell if he is right. I would still invest in DropBox when or if it goes public.

  1. dpicardi

    Joined: Dec 1969

    +5

    they still should have sold when they had the chan

    This has become a me too market. Dropbox will eventually get bought/comsumed. I just got 50GB of free space from Box.net. I doubt I'll ever use dropbox again... unless they pony up more free space (which doesn't add to their bottom-line. Jobs was right. This is a commodity now pure and simple.

  1. SockRolid

    Joined: Dec 1969

    +16

    Only one thing is certain

    When Apple offers you nine digits for you technology, it will one way or another become an Apple feature. Either you sell it to them and become Apple employees (e.g. Siri), or they'll build their own version and possibly crush you (e.g. iCloud.)

    Take your pick.

  1. testudo

    Joined: Dec 1969

    -3

    Re: they still should have sold

    Of course they should have sold. Then maybe iCloud would have a good chance at synchronizing files as well as dropbox does.

    This has become a me too market. Dropbox will eventually get bought/comsumed.

    OK, but for how much? If they end up making far more than Steve offered, then they shouldn't have sold.

    I just got 50GB of free space from Box.net. I doubt I'll ever use dropbox again... unless they pony up more free space (which doesn't add to their bottom-line).

    And what adds to Box.net's bottom line? And how did you get 50GB of free space when their free option is 5GB? You make no sense.

    Jobs was right. This is a commodity now pure and simple.

    OK, and what? That didn't stop him from wanting to buy the company. There must have been a reason, you know, like he thought their product was something Apple could use. Like how they buy so many other companies' ideas/products and integrate into the Apple world.

  1. SunSeeker

    Joined: Dec 1969

    +4

    @testudo

    Where were you six days ago
    http://www.macnn.com/tag/Box

  1. qazwart

    Joined: Dec 1969

    +3

    Not Sure...

    One of the problems is that there's nothing that's protecting Dropbox from someone like Apple aping everything they do. It's like what happened to Vonage. They had a great idea, but the cable companies could implement it right on their own networks, and leave Vonage out. Apple could make an exact duplicate Dropbox's service.

    The big difference is that Dropbox is sort of a neutral party. People who use Linux, Macs, and Windows computers use Dropbox. If Apple came out with their own service, it wouldn't be as universal -- even if Apple had Windows and Linux clients. That's one of the reasons why Dropbox would have been worth that much for Apple.

    iCloud is a Mac answer, but it doesn't really handle Windows and Linux too well. Besides, the big thing with Dropbox is the seamless sync. I put something in the Dropbox folder, and its sync'd -- no need to go to a webpage. iClould doesn't quite do that yet.

  1. darkelf

    Joined: Dec 1969

    +1

    between

    between dropbox and box.net, box.net lacks a few things which are pretty important. like file sync to a desktop machine, without forking out for a business account.

  1. gplawhorn

    Joined: Dec 1969

    0

    Apple needs Dropbox

    Jobs "announced iCloud and derided Dropbox as just a partial attempt at solving the question of getting files from every device into one place."

    Well, Steve didn't get much wrong, but he was pretty much completely wrong on this. iCloud DOESN'T get files from every device into one place. There is currently ZERO syncing between my Macbook Pro and my IOS devices (iPad 2 and iPhone 4). None. Zilch. Nada.

    At least with Dropbox I can easily get my docs onto my iPad, even if I can't get them back to the Mac; Apple can't even do that at this point.

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