This seems like a very convoluted way of coming to the valuation. Revenue != profit. I can easily create business that generates $1bn/month in revenue by selling dollars for 90 cents. Dropbox may be worth $8bn, but surely it makes more sense to assess the valuation based on the growth in profitability?
The Dropbox board obviously feels that an $8 Billion valuation is appropriate. As rational actors, they want to raise money at the highest valuation possible. They have more information than any TechCrunch blogger, so I highly doubt Dropbox is undervalued.
It's incredible how cynical everyone is in this thread about the valuation of a company that actually MAKES MONEY and how optimistic people were about the Snapchat valuation in the thread from last week, a company that hasn't made a dime.<p>It seems the only way to really get a massive valuation as a "company" is to make sure you don't start making any actual money, otherwise people will stop harping about "growth is the only thing that matters, this valuation is accurate" and switch to "profit is the only thing that matters, this valuation is ridiculous."
Twitter's and Dropbox's business models couldn't be more different. Heck, everything about their businesses is dissimilar. This comparison is idiotic.
The analysis sounds a bit absurd to me. It does not matter if Dropbox is making $1B or $0.5B, what matters is how much profit are they making and if that method of making profits is scalable.<p>If a company that is making $1B in yearly revenues is raising a paltry sum of $250m through investments I am not sure if they see themselves in good financial situation.
I don't know much of anything about company valuations, but in terms of what the following two companies mean to <i>me</i> and what I believe they means to the <i>world</i>: if Dropbox is valued at $8B, I no longer have any reservations whatsoever with Tesla's valuation based on its stock price. (I do recognize that its price is being corrected this month, but I suspect it will eventually trend back upward.)<p>From my point of view, Tesla brings me at least ten times the value of Dropbox. I don't even think Dropbox represents a problem that should exist long-term assuming a re-disintermediated Internet, which is where I am optimistic we're heading eventually. Storing and sharing my data using someone else's service is retrograde.
Social networks are winner take all markets, whereas Dropbox is not in such a market. Twitter, Facebook, and LinkedIn are all trading at 20-40 times revenue based on the fact that they enjoy strong network effects.
Anybody have any idea what the distribution is here for consumer vs business?<p>I've literally never heard of anyone, company or individual, paying for Dropbox.
Valuing any company by comparing it to Twitter, a company many consider to be crazily overvalued, seems somewhat inaccurate... I'm sure the Dropbox board has a better idea of what the company is actually worth.
Considering that Dropbox are completely dependant on Amazon for their service and overnight Amazon could sink them "ooops your instances just got deleted, oops"<p>8 billion is a bit of a joke<p>Now if they owned their own equipment in their own datacenters...
Are there not several DropBox clones on GitHub?<p>And several competitors already there (and something called Box that is less consumer orientated?)<p>Add in the switching costs are low to non-existent (it is just git isn't it?) - surely their competitive most is almost non-existent - in which case their profits are going to constantly eaten by competitors.<p>What is it I am missing?