Dropbox rejected nine-figure buyout offer from Apple in 2009

Posted:
in General Discussion edited January 2014
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.
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Comments

  • Reply 1 of 123
    al_bundyal_bundy Posts: 1,525member
    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
  • Reply 2 of 123
    s4mb4s4mb4 Posts: 267member
    i am disappointed with iCloud. great idea, but half baked to work only for cetain people.
  • Reply 3 of 123
    I can't believe they refused. How stupid of them.
  • Reply 4 of 123
    bocboc Posts: 72member
    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.
  • Reply 5 of 123
    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.
  • Reply 6 of 123
    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.
  • Reply 7 of 123
    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.
  • Reply 8 of 123
    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.
  • Reply 9 of 123
    macrrmacrr Posts: 488member
    9 figs.. so 100M at least?



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



    talk about missing opportunities.



  • Reply 10 of 123
    slurpyslurpy Posts: 5,115member
    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.
  • Reply 11 of 123
    blastdoorblastdoor Posts: 1,893member
    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.
  • Reply 12 of 123
    I dig it. The guys want to build it up themselves. Are they still seeking investors? I don't have a spare $100mil anymore.
  • Reply 13 of 123
    irelandireland Posts: 17,547member
    They have some balls, I'll give them that.
  • Reply 14 of 123
    what a dumbass! what future does dropbox have now? Probably not a lot.
  • Reply 15 of 123
    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.
  • Reply 16 of 123
    rejecting 900 mil then turning off hash match instant upload, 2 major mistakes in my mind...
  • Reply 17 of 123
    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.
  • Reply 18 of 123
    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.
  • Reply 19 of 123
    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.
  • Reply 20 of 123
    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.
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