7 ms·

Mailbox Cost Dropbox Around $100 Million

74 points by ruswick 14y ago

jld 14y ago
Someone commented on that article, that whomever pushed through this deal was worth their weight in gold. Or ~4700 pounds. $100,000,000 / ($1,500/oz * 14 oz/lb) = 4700 lbs
- mariusz331 14y ago
  ~4200
- Arelius 14y ago
  Well if the deal pusher was worth his weight in gold, and let's say he's about 150 lbs 150 lbs * 14 oz/lb * $1,500/oz = $3,150,000 Yeah, I'd say that whomever pushed the deal through may be worth $3mil
- joering2 14y ago
  Mail had too much hype from day #1; something like RIP Airtime on steroids. Usually when it happens it means the board/owners/executive managment is very deeply connected to the media world (like with Color). For that reason alone, it doesn't surprise me they sold it to a large player. Such a quick sale may mean they were dissapointed with their growth but thats speculation. I could be a favor from one exec to another; something like board members of both FB and Instagram selling one to another. I wouldn't be surprised if Mail will share the faith of Color, Airtime or many others...
  - stinky613 14y ago
    Personally, the hype was what pushed me past the Ambivalence Tipping Point. The last time anyone really tried to get me excited about email was when Google had a mysterious beta webmail that was invite only. It was a good five years before there was anything in the market that gave me any second thought on switching away from gmail as my email browser. That said, Mailbox is sleek but gimmicky, and I have doubts about its long-term value. Finally getting accepted for Mailbox was exciting. I wouldn't want everyone to do the same thing, but I'm glad that they did.
    - Arelius 14y ago
      > It was a good five years before there was anything in the market that gave me any second thought on switching away from gmail as my email browser. What was it that gave you a second thought, if you don't mind me asking.
- joeguilmette 14y ago
  I hate to be that guy, but isn't 1lb 16oz?
  - letney 14y ago
    Gold is traditionally measured in Troy Ounces. There are exactly 14.58333... troy oz./lb
tptacek 14y ago
Whoah. So much for the "acquihire" snark. Congratulations to everyone involved.
joonix 14y ago
Cost? An acquisition isn't a "cost." However, this one surely will become a cost when they write down the value of Mailbox by $99.95 million.
citricsquid 14y ago
> around $100 million in cash and stock There was talk of Dropbox being valued in the billions, if the majority of the sale price is stock (say, $90 million?) would that be a high amount of stock for Dropbox to use on an acquisition ($4 billion valuation, $90 million = ~2%?) or does that sound reasonable for something they're expecting to be important in the future?
- argonaut 14y ago
  2% is not at all a high amount of stock to issue.
minimaxir 14y ago
Mailbox is the Draw Something of Email.
- beering 14y ago
  Are you implying that it'll sell in an overvalued acquisition and then languish in the hands of its new parent company? Or are you saying that it's popular?
  - signed0 14y ago
    I would imagine they meant the former. If they wanted to say it was popular they would compare it to Angry Birds.
- seanlinehan 14y ago
  This seems to be a the type of comment that is catchy, but in truth mostly vacuous. How does one have a 'Draw Something' of email? There is no sticking power to most games. There are high switching costs (in terms of time, productivity, etc.) when it comes to e-mail. Hell, I used Yahoo Mail for years after Gmail came out because I wasn't used to its interface. If Mailbox has managed to get people to switch to their app, it is likely that they will continue to use the app... Not drop it in three months like people did with Draw Something.
  - starik36 14y ago
    Anecdotal evidence. 2 out of three people who initially installed Mailbox and waited in line with me have gone back to the regular Mail app. I am likely to do so as well soon. Why? While Mailbox is nice, it only adds a single feature: the ability to defer dealing with email till later date. However, its drawback is that it only does GMail. My world also includes Exchange and Yahoo mail. I don't want to have to use separate apps to access my mail. If they add other types of accounts, great, will talk. But for now, I can see why the OP is calling it 'Draw Something' of email.
CoachRufus87 14y ago
Can someone please explain the economics behind this deal? Congrats to those involved...but at the end of the day, this just doesn't make much sense (to an outsider at least).
- minimaxir 14y ago
  "But at the end of the day, this just doesn't make much sense" could describe every startup M&A deal made in the past year.
- Samuel_Michon 14y ago
  I'm a Dropbox member. I pay $100 a year for the privilege. I use it because it integrates well with my desktop OS and several apps I use on my mobile devices. I'm still on the waiting list for Mailbox, but I'll happily fork over another $100 a year to use it. A portion of Dropbox's customers have grown accustomed to paying for the service. I believe those are Mailbox's future customers. Mailbox should be a premium add-on to Dropbox. Even if the Mailbox add-on is priced at $50 a year, if only 1 million of Dropbox's customers subscribe and they stay with the plan for two years, Dropbox will have recouped its investment. I believe that providing features like this add to the Dropbox brand. It's about adding infrastructure that the OSes are leaving at the wayside. In the same vein, I would like Dropbox to add RSS & and photo/video/music sharing backends that client apps could tie into.
- ctbeiser 14y ago
  Dropbox's goal seems to be killing the local filesystem on iOS. Email, being a big part of using an iPhone and the associated file-transfering, is their one big problem; you can't attach things to emails from dropbox, or save them to it from the default app. Here, they get a high-quality email app for their users, and it gives them the opportunity to do things like send attachments as links to dropbox files (great for lock-in), and give users a positive brand experience, to prevent the commoditization of the space.
moe 14y ago
What's with the absurd valuation? Are they gonna bump the price to $10 and hope to sell 10 million copies? Do they hope adding a mail client to Dropbox will bring them.. um.. how many million new customers? Is it some sort of tax evasion scheme? Or do they plan to flip it to the next bigger idiot for $200mio? Or what, the hell, is the idea here? I'd really like to understand the rationale behind these kind of deals. Who profits from doing that?
- argonaut 14y ago
  What's with the absurd comment? We don't even know if the valuation is $100 million. "Well-over" $50 million could be $60 million. I'd reserve my judgement until the final number is confirmed. Maybe the final number is $100 million. Maybe not. When a reporter says "And we’ve heard" you can translate that to they heard a rumor. Is it some sort of tax evasion scheme? Are you intentionally throwing out absurdities? In a certain light, this acquisition might make sense from a strategic, rather than ROI, point of view: my guess is that Dropbox thinks Mailbox will be the email app for mobile, just as Gmail became the the email web service for Google. Gmail doesn't really turn any significant profit AFAIK, yet Gmail makes sense because it strategically anchors Google's entire ecosystem. In that sense, Mailbox might become part of an ecosystem of productivity/collaboration tools that Dropbox creates.
  - moe 14y ago
    "Well-over" $50 million could be $60 million You say that as if $60 million would be any less absurd? Is it some sort of tax evasion scheme? Are you intentionally throwing out absurdities? No. Companies tend to do really weird[1] things to avoid taxes. I'm honestly trying to wrap my head around these kind of deals (color was the textbook example, but it's not like there's a shortage on them). [1] http://www.independent.co.uk/news/world/americas/new-twist-in-stricken-rig-saga-shell-was-moving-it-to-avoid-tax-8439128.html http://www.independent.co.uk/news/world/americas/new-twist-i...
    - potatolicious 14y ago
      > "You say that as if $60 million would be any less absurd?" I find neither price absurd. It is clear that Dropbox has not bought Mailbox for the purposes of selling copies of Mailbox - making $100mm back that way is, of course, insanity. Dropbox right now is having its core feature (online storage) attacked by competitors with far-reaching and deeply integrated stacks. See: iCloud, Google, etc, where the cloud storage is deeply integrated specific content on your device. Photos, documents, email, etc. It would seem like they're trying to develop this stack for themselves and take on Google and Apple directly. Whether or not this is the right strategy I cannot say, but a cloud email service with a best-of-breed UI will certainly help them cement the market share they need. And having seen Mailbox, it's very competitive with what is IMO the next-best mobile email client, GMail, and takes iOS's Mail.app out back and shoots it. I expect the next moves to be either developing or acquiring media sharing (photos, videos, etc) apps. This is the sort of ecosystem they need to create to hope to sell Dropbox as the "your data, everywhere, without lock-in" value proposition. Mailbox isn't just a half-decent email UI, it is the best email UI we've seen in ages, in a field where there is no shortage of competition. Even vaunted Apple's email app pales in comparison.
tvladeck 14y ago
Not trolling - but can someone who feels this way please explain the notion of disgust at this price? The way I see it, it's the shareholders' money / assets that are being used here. I'm not saying they are making a good decision; I am saying that I think the wise-ness of the decision feels fairly irrelevant to me. It could be the case that people feel that the Mailbox founders are undeserving of this reward. Or, perhaps it's the case that people feel a sense of outrage when things (even when the things are not theirs) are mismanaged in their opinion. The way I feel is that this price is an indication that something like Mailbox is very valuable -- perhaps more valuable than I previously thought -- and it's an indication to the "market" to make more things like Mailbox. And as far as the economic rationale for this purchase, I see a variety of ways it could end up being a great deal for Dropbox. Perhaps it will add significant functionality to the core product that will drive user acquisition, or maybe it will drive increased utilization and convert existing users -- even if no one ever pays a dime for Mailbox the app, it could end up making Dropbox a lot of money. Or, it could not, but as an option on the potential (and having no way to value this myself), perhaps 100m was the right price.
- damoncali 14y ago
  Well, for one, you could build it and buy a million users for $100 a piece for about the same price. Granted you can't do that with inflated stock, but still...
habosa 14y ago
I don't know about 100M, but I can definitely see how Mailbox is worth a lot of money to Dropbox. Dropbox has always been a company that stood on the quality of its product. It doesn't have the most features (that's probably SkyDrive or Google Drive) and it's not the cheapest, but it works insanely well and it works everywhere you want it to. That, and the headstart they had, is what put Dropbox where it is right now. Mailbox is a quality-first mail app that fits with Dropbox's quality standards, and it allows them to take their first step into the "feature-rich web storage" field without trying to build out an office suit like MS Office or Google Docs that they clearly can't catch up to. This was a chance to buy their way into the mail game, with what some people would consider the best mobile mail app in the business.
ianstormtaylor 14y ago
It is a very high number, but people aren't getting that they didn't buy the codebase or the team. They bought the waiting list. If Dropbox had been wanting to get into the email game, a waiting list of 1M people is a pretty good way to start. Sure they could have emailed out a blast to all their users and gotten a ton of traction that way, but they can _still_ do that. Not to mention, the name Mailbox is a pretty perfect match for Dropbox.
- jessriedel 14y ago
  That doesn't make sense. That would be $1k per name on the waiting list.
  - nlh 14y ago
    I think you're off by an order of magnitude. 1M people on the waiting list = $100 / name. Still a lot.
    - jessriedel 14y ago
      ianstormtaylor edited his comment after I posted, and did not make a note of it. It used to say 100k.
      - ianstormtaylor 14y ago
        It's true, I did.
whatsup 14y ago
Dropbox just took a dump on their feng shui/pristine media perception
tlogan 14y ago
I know that many here are saying that valuation/cost is too big but I'm convinced that this "cloud" is much bigger than people think. And I for one want Dropbox version of email (and cut crappy gmail) - something that is simple and just works.
- AWDrift0 14y ago
  Is there something difficult about gmail that I am missing? How does an email client replace gmail again?

74 points by ruswick 14y ago

jld 14y ago

Someone commented on that article, that whomever pushed through this deal was worth their weight in gold. Or ~4700 pounds. $100,000,000 / ($1,500/oz * 14 oz/lb) = 4700 lbs

mariusz331 14y ago
~4200
Arelius 14y ago
Well if the deal pusher was worth his weight in gold, and let's say he's about 150 lbs 150 lbs * 14 oz/lb * $1,500/oz = $3,150,000 Yeah, I'd say that whomever pushed the deal through may be worth $3mil
joering2 14y ago
Mail had too much hype from day #1; something like RIP Airtime on steroids. Usually when it happens it means the board/owners/executive managment is very deeply connected to the media world (like with Color). For that reason alone, it doesn't surprise me they sold it to a large player. Such a quick sale may mean they were dissapointed with their growth but thats speculation. I could be a favor from one exec to another; something like board members of both FB and Instagram selling one to another. I wouldn't be surprised if Mail will share the faith of Color, Airtime or many others...
- stinky613 14y ago
  Personally, the hype was what pushed me past the Ambivalence Tipping Point. The last time anyone really tried to get me excited about email was when Google had a mysterious beta webmail that was invite only. It was a good five years before there was anything in the market that gave me any second thought on switching away from gmail as my email browser. That said, Mailbox is sleek but gimmicky, and I have doubts about its long-term value. Finally getting accepted for Mailbox was exciting. I wouldn't want everyone to do the same thing, but I'm glad that they did.
  - Arelius 14y ago
    > It was a good five years before there was anything in the market that gave me any second thought on switching away from gmail as my email browser. What was it that gave you a second thought, if you don't mind me asking.
joeguilmette 14y ago
I hate to be that guy, but isn't 1lb 16oz?
- letney 14y ago
  Gold is traditionally measured in Troy Ounces. There are exactly 14.58333... troy oz./lb

tptacek 14y ago

Whoah. So much for the "acquihire" snark. Congratulations to everyone involved.

joonix 14y ago

Cost? An acquisition isn't a "cost." However, this one surely will become a cost when they write down the value of Mailbox by $99.95 million.

citricsquid 14y ago

> around $100 million in cash and stock There was talk of Dropbox being valued in the billions, if the majority of the sale price is stock (say, $90 million?) would that be a high amount of stock for Dropbox to use on an acquisition ($4 billion valuation, $90 million = ~2%?) or does that sound reasonable for something they're expecting to be important in the future?

argonaut 14y ago
2% is not at all a high amount of stock to issue.

minimaxir 14y ago

Mailbox is the Draw Something of Email.

beering 14y ago
Are you implying that it'll sell in an overvalued acquisition and then languish in the hands of its new parent company? Or are you saying that it's popular?
- signed0 14y ago
  I would imagine they meant the former. If they wanted to say it was popular they would compare it to Angry Birds.
seanlinehan 14y ago
This seems to be a the type of comment that is catchy, but in truth mostly vacuous. How does one have a 'Draw Something' of email? There is no sticking power to most games. There are high switching costs (in terms of time, productivity, etc.) when it comes to e-mail. Hell, I used Yahoo Mail for years after Gmail came out because I wasn't used to its interface. If Mailbox has managed to get people to switch to their app, it is likely that they will continue to use the app... Not drop it in three months like people did with Draw Something.
- starik36 14y ago
  Anecdotal evidence. 2 out of three people who initially installed Mailbox and waited in line with me have gone back to the regular Mail app. I am likely to do so as well soon. Why? While Mailbox is nice, it only adds a single feature: the ability to defer dealing with email till later date. However, its drawback is that it only does GMail. My world also includes Exchange and Yahoo mail. I don't want to have to use separate apps to access my mail. If they add other types of accounts, great, will talk. But for now, I can see why the OP is calling it 'Draw Something' of email.

CoachRufus87 14y ago

Can someone please explain the economics behind this deal? Congrats to those involved...but at the end of the day, this just doesn't make much sense (to an outsider at least).

minimaxir 14y ago
"But at the end of the day, this just doesn't make much sense" could describe every startup M&A deal made in the past year.
Samuel_Michon 14y ago
I'm a Dropbox member. I pay $100 a year for the privilege. I use it because it integrates well with my desktop OS and several apps I use on my mobile devices. I'm still on the waiting list for Mailbox, but I'll happily fork over another $100 a year to use it. A portion of Dropbox's customers have grown accustomed to paying for the service. I believe those are Mailbox's future customers. Mailbox should be a premium add-on to Dropbox. Even if the Mailbox add-on is priced at $50 a year, if only 1 million of Dropbox's customers subscribe and they stay with the plan for two years, Dropbox will have recouped its investment. I believe that providing features like this add to the Dropbox brand. It's about adding infrastructure that the OSes are leaving at the wayside. In the same vein, I would like Dropbox to add RSS & and photo/video/music sharing backends that client apps could tie into.
ctbeiser 14y ago
Dropbox's goal seems to be killing the local filesystem on iOS. Email, being a big part of using an iPhone and the associated file-transfering, is their one big problem; you can't attach things to emails from dropbox, or save them to it from the default app. Here, they get a high-quality email app for their users, and it gives them the opportunity to do things like send attachments as links to dropbox files (great for lock-in), and give users a positive brand experience, to prevent the commoditization of the space.

moe 14y ago

What's with the absurd valuation? Are they gonna bump the price to $10 and hope to sell 10 million copies? Do they hope adding a mail client to Dropbox will bring them.. um.. how many million new customers? Is it some sort of tax evasion scheme? Or do they plan to flip it to the next bigger idiot for $200mio? Or what, the hell, is the idea here? I'd really like to understand the rationale behind these kind of deals. Who profits from doing that?

argonaut 14y ago
What's with the absurd comment? We don't even know if the valuation is $100 million. "Well-over" $50 million could be $60 million. I'd reserve my judgement until the final number is confirmed. Maybe the final number is $100 million. Maybe not. When a reporter says "And we’ve heard" you can translate that to they heard a rumor. Is it some sort of tax evasion scheme? Are you intentionally throwing out absurdities? In a certain light, this acquisition might make sense from a strategic, rather than ROI, point of view: my guess is that Dropbox thinks Mailbox will be the email app for mobile, just as Gmail became the the email web service for Google. Gmail doesn't really turn any significant profit AFAIK, yet Gmail makes sense because it strategically anchors Google's entire ecosystem. In that sense, Mailbox might become part of an ecosystem of productivity/collaboration tools that Dropbox creates.
- moe 14y ago
  "Well-over" $50 million could be $60 million You say that as if $60 million would be any less absurd? Is it some sort of tax evasion scheme? Are you intentionally throwing out absurdities? No. Companies tend to do really weird[1] things to avoid taxes. I'm honestly trying to wrap my head around these kind of deals (color was the textbook example, but it's not like there's a shortage on them). [1] http://www.independent.co.uk/news/world/americas/new-twist-in-stricken-rig-saga-shell-was-moving-it-to-avoid-tax-8439128.html http://www.independent.co.uk/news/world/americas/new-twist-i...
  - potatolicious 14y ago
    > "You say that as if $60 million would be any less absurd?" I find neither price absurd. It is clear that Dropbox has not bought Mailbox for the purposes of selling copies of Mailbox - making $100mm back that way is, of course, insanity. Dropbox right now is having its core feature (online storage) attacked by competitors with far-reaching and deeply integrated stacks. See: iCloud, Google, etc, where the cloud storage is deeply integrated specific content on your device. Photos, documents, email, etc. It would seem like they're trying to develop this stack for themselves and take on Google and Apple directly. Whether or not this is the right strategy I cannot say, but a cloud email service with a best-of-breed UI will certainly help them cement the market share they need. And having seen Mailbox, it's very competitive with what is IMO the next-best mobile email client, GMail, and takes iOS's Mail.app out back and shoots it. I expect the next moves to be either developing or acquiring media sharing (photos, videos, etc) apps. This is the sort of ecosystem they need to create to hope to sell Dropbox as the "your data, everywhere, without lock-in" value proposition. Mailbox isn't just a half-decent email UI, it is the best email UI we've seen in ages, in a field where there is no shortage of competition. Even vaunted Apple's email app pales in comparison.

tvladeck 14y ago

Not trolling - but can someone who feels this way please explain the notion of disgust at this price? The way I see it, it's the shareholders' money / assets that are being used here. I'm not saying they are making a good decision; I am saying that I think the wise-ness of the decision feels fairly irrelevant to me. It could be the case that people feel that the Mailbox founders are undeserving of this reward. Or, perhaps it's the case that people feel a sense of outrage when things (even when the things are not theirs) are mismanaged in their opinion. The way I feel is that this price is an indication that something like Mailbox is very valuable -- perhaps more valuable than I previously thought -- and it's an indication to the "market" to make more things like Mailbox. And as far as the economic rationale for this purchase, I see a variety of ways it could end up being a great deal for Dropbox. Perhaps it will add significant functionality to the core product that will drive user acquisition, or maybe it will drive increased utilization and convert existing users -- even if no one ever pays a dime for Mailbox the app, it could end up making Dropbox a lot of money. Or, it could not, but as an option on the potential (and having no way to value this myself), perhaps 100m was the right price.

damoncali 14y ago
Well, for one, you could build it and buy a million users for $100 a piece for about the same price. Granted you can't do that with inflated stock, but still...

habosa 14y ago

I don't know about 100M, but I can definitely see how Mailbox is worth a lot of money to Dropbox. Dropbox has always been a company that stood on the quality of its product. It doesn't have the most features (that's probably SkyDrive or Google Drive) and it's not the cheapest, but it works insanely well and it works everywhere you want it to. That, and the headstart they had, is what put Dropbox where it is right now. Mailbox is a quality-first mail app that fits with Dropbox's quality standards, and it allows them to take their first step into the "feature-rich web storage" field without trying to build out an office suit like MS Office or Google Docs that they clearly can't catch up to. This was a chance to buy their way into the mail game, with what some people would consider the best mobile mail app in the business.

ianstormtaylor 14y ago

It is a very high number, but people aren't getting that they didn't buy the codebase or the team. They bought the waiting list. If Dropbox had been wanting to get into the email game, a waiting list of 1M people is a pretty good way to start. Sure they could have emailed out a blast to all their users and gotten a ton of traction that way, but they can _still_ do that. Not to mention, the name Mailbox is a pretty perfect match for Dropbox.

jessriedel 14y ago
That doesn't make sense. That would be $1k per name on the waiting list.
- nlh 14y ago
  I think you're off by an order of magnitude. 1M people on the waiting list = $100 / name. Still a lot.
  - jessriedel 14y ago
    ianstormtaylor edited his comment after I posted, and did not make a note of it. It used to say 100k.
    - ianstormtaylor 14y ago
      It's true, I did.

whatsup 14y ago

Dropbox just took a dump on their feng shui/pristine media perception

tlogan 14y ago

I know that many here are saying that valuation/cost is too big but I'm convinced that this "cloud" is much bigger than people think. And I for one want Dropbox version of email (and cut crappy gmail) - something that is simple and just works.

AWDrift0 14y ago
Is there something difficult about gmail that I am missing? How does an email client replace gmail again?