Drop­box reaches 500 mln users, but do they have

Financial Mirror (Cyprus) - - FRONT PAGE -

On­line stor­age com­pany Drop­box reached a mile­stone as its user base hit 500 mil­lion. It is not clear that Drop­box can turn that into value, as far as in­vestors are con­cerned.

Drop­box founders Drew Hous­ton and Arash Fer­dowsi an­nounced: “With 500 mil­lion signups un­der our belt, it’s ex­cit­ing to see Drop­box con­nect­ing peo­ple around the world with ev­ery­thing that’s im­por­tant to them. But this mile­stone hints at some­thing much big­ger—how much our users are work­ing to­gether.

“Since we started, Drop­box users have cre­ated 3.3 bil­lion con­nec­tions by shar­ing with each other. That’s a 51% jump in just the last year. And as new peo­ple join, they’re bring­ing friends, fam­ily, and co-work­ers along. 44% of new ac­counts were opened when ex­ist­ing users in­tro­duced peo­ple to Drop­box. That’s mak­ing for an even more cre­ative and col­lab­o­ra­tive com­mu­nity.”

As sev­eral large com­pa­nies with hun­dreds of mil­lions of cus­tomers on­line have shown, the value of those cus­tomers may be very lim­ited. The pri­mary ex­am­ple of this is Twit­ter Inc. (NYSE: TWTR), which has lost 65% of its mar­ket cap in the past two years. The anx­i­ety about Drop­box is that sev­eral other com­pa­nies of­fer sim­i­lar ser­vices. Crunch Base names 35 of them, which are not large com­pa­nies like Mi­crosoft Corp. (NAS­DAQ: MSFT), Al­pha­bet Inc. (NAS­DAQ: GOOGL) and Ap­ple Inc. (NAS­DAQ: AAPL). Each of th­ese com­pa­nies has hun­dreds of mil­lions of cus­tomers and prob­a­bly is will­ing to lose money to get mar­ket share in the cloud stor­age busi­ness.

Drop­box has 500 mil­lion users and a busi­ness that could be swamped by an army of well-heeled com­pe­ti­tion. (Source: 24/7 Wall St.com)

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