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Dropbox rejected nine-figure buyout offer from Apple in 2009

post #1 of 124
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Cloud-based file storage service Dropbox turned down a multi-million-dollar offer from Apple and a personal pitch from Steve Jobs in 2009, a new profile of the company has revealed.

The details come from a new look at Dropbox from Forbes, which declares the company "tech's hottest startup." Founder Drew Houston gained the attention of Jobs after he modified Apple's file system to have his startup logo appear on Mac OS X.

So in December of 2009, Jobs, Houston and his partner Arash Ferdowsi met for a meeting in Jobs's office at Apple's Cupertino, Calif., headquarters. Houston said he was ecstatic, as he considers Jobs his hero.

Houston reportedly attempted to show a demo of Dropbox to Jobs from his laptop, but the Apple co-founder stopped him by saying, "I know what you do."

Jobs then began his own sales pitch, viewing Dropbox as a strategic asset for Apple. But Houston told Jobs he wouldn't sell his company, despite what was said to be a nine-figure offer from Apple.

The Apple chief then reportedly told Houston that Apple would enter their market, and said he considered what Dropbox has to offer a feature, not a product.

"Courteously, Jobs spent the next half hour waxing over tea about his return to Apple, and why not to trust investors," author Victoria Barret wrote.

After the meeting, Jobs again asked to meet with the Dropbox executives at their San Francisco office, but Houston declined, afraid of giving away any company secrets, and suggested they instead meet in Silicon Valley. Dropbox apparently did not hear from Jobs again.



Jobs, of course, went on to announce Apple's iCloud service at this year's Worldwide Developers Conference. iCloud went live to the general public last week, allowing users to automatically sync data like contacts, calendars, pictures and documents across a range of devices.

Apple's approach with iCloud is somewhat different from Dropbox, as Apple gives users 5 gigabytes of storage for free, but it is largely designed for iOS devices like the iPhone and iPad, which lack a traditional user-accessible file structure. Dropbox, on the other hand, automatically syncs files and folders for users on a range of devices, including the iPhone, but gives users more flexibility on what files to sync, and also how to share them with others.
post #2 of 124
idiots

icloud just has to be popular enough to steal enough customers to tank the business. and icloud will improve every year.

this year is just the core features for most people. expect apple to add more free features every year
post #3 of 124
i am disappointed with iCloud. great idea, but half baked to work only for cetain people.
post #4 of 124
I can't believe they refused. How stupid of them.
post #5 of 124
Quote:
Originally Posted by s4mb4 View Post

i am disappointed with iCloud. great idea, but half baked to work only for cetain people.

Patience. Even when you release a great product, you often want to reserve tough product feature improvements for later. It is difficult enough to come out with a large new product without making it overly complex on day one.

OS X didn't come out full force with everything at once or it likely would have been considered too difficult and thus a failure at that early stage.
post #6 of 124
Likely the right decision for them. It is a good business model, but competition is growing. All comes down to the value of the brand.
post #7 of 124
while i think it would have been a great move for these guys financially to agree to apple's offer, i'm happy this never happened and that dropbox remained a stand alone company/product. i use dropbox to share documents with other people all the time, something iCloud hasn't addressed at all. i hope apple chooses to compete with dropbox even more and is able to add on some more capabilities, however, being in bed with content providers on so many fronts inhibits their ability to allow users to share things with each other with the ease they hope for.
post #8 of 124
This is fascinating. A lot of people suspected Apple would have tried this.

I admire this guy for refusing. He must have been tempted. The deal would probably have meant huge wealth and a job at Apple integrating his technology with Apple's systems and who wouldn't be tempted by that? I think he has cajones.

People are talking about iCloud, but this was two years ago. It was a judgement call and it's far too soon to say he made the wrong decision. I'm sure DropBox are worried about iCloud; the excellence of their product shows they have the intelligence to understand Apple is a formidable opponent.

For the time being, DropBox offers functionality that iCloud does not, including being completely cross-platform. They'll be safe for now, but in the long-term I suspect it'll be a different story.

Either way, I admire a man who turns down enough money to retire to his own private island to carry on developing a company he loves. I would imagine Steve Jobs admired the decision even if he disagreed with it.
post #9 of 124
Quote:
Originally Posted by al_bundy View Post

idiots

icloud just has to be popular enough to steal enough customers to tank the business. and icloud will improve every year.

this year is just the core features for most people. expect apple to add more free features every year

If Dropbox didn't have any competition their audience would be much wider but with iCloud on the scene, Dropbox just became a product for the few while iCloud is a product for the many.

As you mentioned... as iCloud's feature set grows, Dropbox's appeal will drop even more.

You would have thought that Houston would have learned something from Yahoo's rejection of MS.
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post #10 of 124
9 figs.. so 100M at least?

haha.. GL getting a better offer for something that will easily become obsolete.

talk about missing opportunities.

post #11 of 124
Dropbox was novel for the time and is still incredibly useful, but trust me, it will become more irrrelevant as time passes. Everyone is baking in similar functionality in their ecosystems and OS, and it will be only a matter of time before dropbox is simply a service that duplicates native functionality for most people. Yes, he had 'guts' to say no, but there's a fine line between that and irrational hubris/pride/stupidity. There's something to be said of taking a good opportunity when one presents itself, after a rational look at the situation. I simply can't see dropbox becoming MORE valuable than it is now, simply less- this is the only reasonable conclusion when taking a birds-eye view of the industry.
post #12 of 124
I can't blame them for wanting to stay independent, but I hope for their sakes that they have product plans that go beyond dropbox, because Jobs was essentially correct in his assessment of dropbox's future.
post #13 of 124
I dig it. The guys want to build it up themselves. Are they still seeking investors? I don't have a spare $100mil anymore.
post #14 of 124
They have some balls, I'll give them that.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #15 of 124
what a dumbass! what future does dropbox have now? Probably not a lot.
post #16 of 124
It's still hard to see a solid business model for Dropbox. How many of the 45 million users only use the free stuff? I mean, they give away 2 GB for free. Then they ask only $9.99/month for 50GB. How many people use the paid stuff? How much does all the infrastructure cost? They raise $250 million in funding from investors. Jobs warned them not to trust them, because they want to see value, year-to-year growth. They need people to sign up and pay each year. I don't see it. And when all this stuff gets injected into every OS (like with Apple iCloud), how do people see the value of it? I don't see it. Most people won't get what Dropbox can do for them, because most consumers are too stupid. And geeks are too fussy to spend money on paid stuff.
post #17 of 124
rejecting 900 mil then turning off hash match instant upload, 2 major mistakes in my mind...
post #18 of 124
Quote:
Originally Posted by monstrosity View Post

what a dumbass! what future does dropbox have now? Probably not a lot.

People not running OS X 10.7.2.
post #19 of 124
As much as I love APple, I believe they could have ruined the DropBox that I use every day. I liked it so much that I purchased the 50 GB plan and so have most of my colleagues. It just works great for workflow and multisite production. Plus sharing a folder is excellent.

What Apple has done with iCould is what I would expect, and that is fine for many consumers, but as a Pro DropBox will likely beat it for some time. We all know Apple could catch up, but for now I will stick with DropBox and just leave iCould for some personal stuff. Besides DropBox has been far more consistent than say iDisk and if the iClouds stumbles at launch (given they had millions of users all rushing in at once) are any indication of iClouds reliability I will just let it keep my calendar and contacts in sync. iCloud is way better than MobileMe was ever with that.
post #20 of 124
Quote:
Originally Posted by island hermit View Post

If Dropbox didn't have any competition their audience would be much wider but with iCloud on the scene, Dropbox just became a product for the few while iCloud is a product for the many.

As you mentioned... as iCloud's feature set grows, Dropbox's appeal will drop even more.

You would have thought that Houston would have learned something from Yahoo's rejection of MS.


There's also competition from box.net and their 50GB giveaway. And they are cross platform too.
post #21 of 124
So glad they did. A lesser man would have taken up the offer and live the rest of their lives in luxury.

I use Dropbox quite regularly, syncing and transferring files across multiple platforms including iOS, Android and Windows, while also conveniently sharing files with family and close friends. Had Apple acquired Dropbox, they would have probably restricted the service to within their own Mac and iOS platforms, similar to what they did with Siri when they made it 4S exclusive.

Best of luck to them and their current and future ventures.
post #22 of 124
Apple bought NeXT and all it's talent and IP for $400 Million. Macrumors is reporting they turned down $800 Million for a file sharing app.

Brain dead.
post #23 of 124
>my roomate's step-sister makes $81 hourly on the internet. She has been out of a job for 10 months but last month her check was $7706 just working on the internet for a >few hours.

I just reported you, please will everyone else do same so we can get rid of this clown

you are just about to lose you appleinsider account, and close the door on the way out

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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post #24 of 124
He is a better man than me. I would have sold.
Hard-Core.
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Hard-Core.
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post #25 of 124
Quote:
Originally Posted by ChristophB View Post

People not running OS X 10.7.2.

But how long will that last? Not long.
post #26 of 124
This reminds me of Groupon rejecting a $6 BILLION offer from Google. Traffic to Groupon has since fallen off a cliff.

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Please update the AppleInsider app to function in landscape mode.

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post #27 of 124
Quote:
Originally Posted by craigciccone View Post

while i think it would have been a great move for these guys financially to agree to apple's offer, i'm happy this never happened and that dropbox remained a stand alone company/product. i use dropbox to share documents with other people all the time, something iCloud hasn't addressed at all. i hope apple chooses to compete with dropbox even more and is able to add on some more capabilities, however, being in bed with content providers on so many fronts inhibits their ability to allow users to share things with each other with the ease they hope for.

up to a point its okay but the free service does not allow storage of certain file formats does it, only pdf's and text not any word processing or spreadsheets, with icloud I can store any format

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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post #28 of 124
I saw iCloud more as a feature and Dropbox more as a product. With iDisk going, Dropbox becomes more useful. I don't see iCloud adding an iDisk feature back in because Apple wants to get away from the filesystem concept. However, there are many users who still like the idea of a hard disk in the cloud....myself included.
post #29 of 124
Quote:
Originally Posted by Paul94544 View Post

up to a point its okay but the free service does not allow storage of certain file formats does it, only pdf's and text not any word processing or spreadsheets, with icloud I can store any format

i'm not sure what service you're talking about, but dropbox supports more than just pdfs and text. i've put video/music/word processing/spreadsheet/so on and so forth.
post #30 of 124
Quote:
Originally Posted by Skaag View Post

I can't believe they refused. How stupid of them.

What if Drop Box had money to counter-offer to buy Apple! Think Steve would have sold?

Money isn't everything... Guess, like Steve, they are doing what they love!
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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #31 of 124
Quote:
Originally Posted by al_bundy View Post

idiots

icloud just has to be popular enough to steal enough customers to tank the business. and icloud will improve every year.

this year is just the core features for most people. expect apple to add more free features every year

You ain't lying brother!!! In this wild a** tech game and with competitors like Apple you better take the money and run. And I got goose bumps just imagining the conversation Jobs had with them fools. They said no to the LEGEND? Are you crazy!!!!
9 figures? Shhhhhhhhhhhhhhhhhhhhhhhhhhhh*********!!!!
Cha Ching!
post #32 of 124
Quote:
Originally Posted by mdriftmeyer View Post

Apple bought NeXT and all it's talent and IP for $400 Million. Macrumors is reporting they turned down $800 Million for a file sharing app.

Brain dead.

I had read months ago they were offered more by a venture capitalist that would allow them to function more or less as they wish, unless Apple's likely interest to shut it down and incorporate their IP into iCloud. Sometimes it's not about the money but the prestige, which is hard to get once you're absorbed into the backend of a product of a mega-company.
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Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #33 of 124
Quote:
Originally Posted by Slurpy View Post

Dropbox was novel for the time and is still incredibly useful, but trust me, it will become more irrrelevant as time passes. Everyone is baking in similar functionality in their ecosystems and OS, and it will be only a matter of time before dropbox is simply a service that duplicates native functionality for most people. Yes, he had 'guts' to say no, but there's a fine line between that and irrational hubris/pride/stupidity. There's something to be said of taking a good opportunity when one presents itself, after a rational look at the situation. I simply can't see dropbox becoming MORE valuable than it is now, simply less- this is the only reasonable conclusion when taking a birds-eye view of the industry.

I think that sums it up. I wonder if they were locked into certain investors so the offer was 'not enough'
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post #34 of 124
Quote:
Originally Posted by solipsism View Post

I had read months ago they were offered more by a venture capitalist that would allow them to function more or less as they wish, unless Apple's likely interest to shut it down and incorporate their IP into iCloud. Sometimes it's not about the money but the prestige, which is hard to get once you're absorbed into the backend of a product of a mega-company.

This guy fantasizes that Dropbox has the capital appeal of a Twitter or a Facebook. They are a backend service and not a very ubiquitous one. They were simply brain dead on this call.
post #35 of 124
Quote:
Originally Posted by s4mb4 View Post

i am disappointed with iCloud. great idea, but half baked to work only for cetain people.

I don't know about half-baked, but I think it was foolish to not support MacOS X 10.6.9 for mail, contacts, and calendars - especially since they're using industry standard protocols.

I can't use iCloud anymore because my family owns some Macs that can not be upgraded to Lion (Core Duo). So now I can't share calendars or contacts with them using iCloud for at least a couple of years.
post #36 of 124
Quote:
Originally Posted by Gustav View Post

I don't know about half-baked, but I think it was foolish to not support MacOS X 10.6.9 for mail, contacts, and calendars - especially since they're using industry standard protocols.

I can't use iCloud anymore because my family owns some Macs that can not be upgraded to Lion (Core Duo). So now I can't share calendars or contacts with them using iCloud for at least a couple of years.

My wife's company doesn't want her to upgrade to Lion yet, so now our Calendar syncing is broken. I hear you. Awful transition story from MobileMe to iCloud.
post #37 of 124
This was an even dumber move than when Panic Software tried to get in bed with AOL instead of Apple. Apple was looking for a platform on which to create to create iTunes and they wanted to buy Audion. http://www.panic.com/extras/audionstory/
post #38 of 124
DropBox is a feature... a feature iCloud still needs.
iCloud still needs management tools. E.g., I do not appreciate being unable to delete pics from Photostream in the cloud.
post #39 of 124
Quote:
Originally Posted by BTBlomberg View Post

As much as I love APple, I believe they could have ruined the DropBox that I use every day. I liked it so much that I purchased the 50 GB plan and so have most of my colleagues. It just works great for workflow and multisite production. Plus sharing a folder is excellent.

What Apple has done with iCould is what I would expect, and that is fine for many consumers, but as a Pro DropBox will likely beat it for some time. We all know Apple could catch up, but for now I will stick with DropBox and just leave iCould for some personal stuff. Besides DropBox has been far more consistent than say iDisk and if the iClouds stumbles at launch (given they had millions of users all rushing in at once) are any indication of iClouds reliability I will just let it keep my calendar and contacts in sync. iCloud is way better than MobileMe was ever with that.

enter a market with multiple players and concentrate on one or two features and polish the hell out of them.
add more features
?
profit

see the history of windows and iphone. i might buy my first Mac just for the iphone to iphoto functionality later this year. icloud will add more features every year and make dropbox a waste of money
post #40 of 124
Quote:
Originally Posted by Booga View Post

My wife's company doesn't want her to upgrade to Lion yet, so now our Calendar syncing is broken. I hear you. Awful transition story from MobileMe to iCloud.

Set up your own iCal server. Keep your calendar private.
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