
Mailbox Cost Dropbox Around $100 Million - ruswick
http://techcrunch.com/2013/03/15/mailbox-cost-dropbox-around-100-million/
======
moe
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
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
_"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-i...](http://www.independent.co.uk/news/world/americas/new-twist-in-
stricken-rig-saga-shell-was-moving-it-to-avoid-tax-8439128.html)

~~~
potatolicious
> _"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.

~~~
moe
_Mailbox isn't just a half-decent email UI, it is the best email UI we've seen
in ages_

I acknowledge that. And I know they didn't just buy the app, but also the
brand, the userbase, the marketing headstart, the team, the momentum.

But still. It boils down to a mobile app that could be cloned, bit-for-bit,
for _way_ under $5 million. Dropbox has a pretty strong brand of its own
already. For instance: Almost everyone I know uses Dropbox. In contrast I have
never heard of mailbox.app before. And I'm a nerd, I read Hacker News, I tend
to know most of the fancy things before everyone else.

Ok, let's ignore that. Let's assume mailbox.app utterly dominates the
(iphone?) market. What would it help them if Dropbox went against them with
their clone?

Users are not exactly loyal when there's no network effect. I can't imagine
mailbox.app would fare all that well against a (near identical)
dropboxmail.app that comes bundled with whatever goodies Dropbox has planned
to take it up with Google.

Sorry, I understand your angle (and your proposed strategy sounds plausible to
me), but I just can't get over that number. Framing it as a long-term strategy
for Dropbox makes it only _more_ batshit insane to me, because even in my
wildest imagination I can't see what mailbox.app brings to the table that
Dropbox couldn't replicate for a fraction of the money in a very short
timespan. And "fraction of money" means a difference of tens of millions of
dollars here.

 _I expect the next moves to be either developing or acquiring media sharing
(photos, videos, etc) apps_

By that logic their next move will be to pull another Color.app?

~~~
potatolicious
> _"But still. It boils down to a mobile app that could be cloned, bit-for-
> bit, for way under $5 million."_

I had an argument about this yesterday with someone. I do not think this
statement is true.

Mailbox is an app that, usability, design, and technology-wise is two standard
deviations away from the mean iPhone app. It is anything but commodity.

If you assembled a team of pretty-decent devs and designers, you probably
couldn't clone Mailbox. To be blunt, the quality of Mailbox's app is _beyond
the capabilities_ of almost every mobile engineering team I've ever come
across, and I write mobile apps for a living.

You could _try_ cloning Mailbox, but it's contingent on first building a truly
world-class design and mobile development team - and I mean world-class
literally, you need to build a mobile team two standard deviations away from
what every startup has. Assembling a team at this level is _really_ friggin'
hard. Mailbox has somehow done it - there's no guarantee that Dropbox could do
it independently.

It might seem a bit hyperbolic, but apps like Mailbox are sort of like the
mobile equivalent of Google - there's a magic sauce and team there that makes
it non-trivial to clone. We're not talking about an app that bolts together
standard UI components and pours some fresh paint on top, this is something
that's at the very extreme end of UX quality.

> _"Dropbox has a pretty strong brand of its own already."_

I highly doubt Dropbox gives a shit about the Mailbox brand as it stands. The
idea is to have the absolute best email client money can buy - and that
competitors will have a hell of a time trying to clone. The whole idea is to
be able to go "Sign up for Dropbox, make email _way_ easier than blech! iPhone
email. And way easier than even GMail!"

> _"I can't imagine mailbox.app would fare all that well against a (near
> identical) dropboxmail.app"_

This rests on the assumption that Dropbox _can_ clone Mailbox. Having used the
Dropbox app extensively, this is a _really_ unsafe assumption. Dropbox's
mobile app quality right now is pretty middling - not bad, but not great. For
them to even start approaching the ability to clone Mailbox they'd first have
to build a brand new team at a level few companies have been able to achieve.

And even if they did, an app like Mailbox is not something a few people can
bang out in a couple of months. IMO Dropbox would be _easily_ at least a year
behind Mailbox. All the while other cloud competitors are looking for the leg
up and willing to acquire Mailbox also.

> _"By that logic their next move will be to pull another Color.app?"_

If people ever gave a shit about Color.app. Color was a flop right out of the
gate. Mailbox has received rave reviews from just about everyone who's touched
it, and the demand continues to be furious.

If Dropbox will acquire a photo sharing app, it will have to hit that bar -
i.e., absolute best in class experience, existing buzz, and _not a pointless
app no one knows what to do with_.

~~~
moe
So, after this flaming endorsement I just had to install mailbox.app. I gave
it a whirl and... well, it's nice.

But can you give an example of the parts that you deem "unclone-able"?

That seems a pretty wild claim. It's not made of pixie dust. And I'm frankly a
little underwhelmed. It's certainly nice, but (to me) not nearly as earth
shattering as you make it sound.

I'll give you that assembling a team to _maintain_ such a standard (and extend
it) is non-trivial. But do you seriously think iOS top-talent wouldn't jump
when dropbox puts, say, _one million dollars per nose_ on the table?

Get a team of five and have them dedicate their life to making the best mail-
client ever. That'll be $5 million dollars, not $100MM.

This whole prospective is of course a little surreal. But so is paying a
hundred million dollars for a mobile mail client...

------
citricsquid
> 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
2% is not at all a high amount of stock to issue.

------
CoachRufus87
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).

~~~
Samuel_Michon
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.

------
habosa
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.

------
minimaxir
Mailbox is the Draw Something of Email.

~~~
seanlinehan
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
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.

------
jld
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

~~~
joeguilmette
I hate to be that guy, but isn't 1lb 16oz?

~~~
letney
Gold is traditionally measured in Troy Ounces. There are exactly 14.58333...
troy oz./lb

------
joonix
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.

------
tptacek
Whoah. So much for the "acquihire" snark.

Congratulations to everyone involved.

------
ianstormtaylor
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
That doesn't make sense. That would be $1k _per name_ on the waiting list.

~~~
nlh
I think you're off by an order of magnitude. 1M people on the waiting list =
$100 / name. Still a lot.

~~~
jessriedel
ianstormtaylor edited his comment after I posted, and did not make a note of
it. It used to say 100k.

~~~
ianstormtaylor
It's true, I did.

------
tlogan
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
Is there something difficult about gmail that I am missing? How does an email
client replace gmail again?

