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Here’s what Dropbox is spending some of its massive cash pile on — startups

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What do you do if you have a couple hundred million dollars to burn? Well, if you’re Dropbox and are building out your flagship file sharing technology into a full platform, you buy tech startups.

Like Hackpad, a collaborative note-taking app, which both companies announced would become part of Dropbox on Thursday. And Loom, which offers a photo management service that ostensibly will fit in well with Dropbox’s new Carousel photo sharing app.

Dropbox, as Re/code reported earlier Thursday, has been in a stealthy buying binge for months now. In March, it also picked up Zulip, a workplace messaging startup out of Cambridge, Mass. It also bought and shut down reading app ReadMill that same month. The company is so sneaky in fact, that its acquisition of machine vision specialist Anchovi Labs in September 2012 didn’t come to light till the next year when it acquired PiCloud.

The San Francisco-based company is extremely well funded, having just landed $500 million in credit financing atop another $607 million in venture funding. But it also faces huge challenges. Its cloud-based service, which lets users easily share and sync documents from their device of choice and store them in the cloud, is wildly popular among consumers, many of whom have brought it to work with them.

Drobox rewrote its core code to bolster its Dropbox for Business product.
Drobox rewrote its core code to bolster its Dropbox for Business product.

But now Dropbox is challenged to convert many of those non-paying customers to the paying sort, which is really tough. And trying to be the file-share purveyor to businesses that have many more enterprise-focused options go choose from, is also a problem. Accellion, Box, Egnyte, LogMeIn(s Logm) are all in this market as are giants Microsoft(s msft) and Google(s goog).

That’s a formidable array for any company — even one with so much money — to compete against.


4 Responses to “Here’s what Dropbox is spending some of its massive cash pile on — startups”

  1. Dropbox is trying to tie in additional services to justify a premium cost to consumers. Unfortunately the pricing difference between them and Google is too much. Unless they lower prices by 50% they are going to run into problems as users migrate to Microsoft and Google.

  2. What a waste! Dropbox has made a fatal mistake trying to mainstream centralized consumer cloud. Your efforts at an ecosystem are just not enough to add pay to store value in this age of NSA Tyranny.

    I’ll be damned if I will be charged for government ease of access. Luck isnt good enough to help you!