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Dropbox at (a jaw-dropping) $5 billion
By Dave Winer on Wednesday, July 13, 2011 at 9:50 AM.

A picture named training.jpgWhen Dropbox started messing with the terms of service on the Friday before the July 4 holiday, it didn't seem very likely it was a random event. You know, one day the CEO woke up and said I know what I'll do today -- I'll screw with the terms-of-service. That'll liven things up a bit. That's not how life is for the CEO of young booming tech company. Usually they're too busy putting out fires. #

It seemed equally unlikely that a lawyer who works for the company decided to stir up some trouble with the users. True, the FTC was giving them some grief. But on the other hand, they had just suffered through an embarassing security mess. The timing seemed strange, unless they were going public or getting acquired. Cleaning up the terms-of-service is a likely checklist item before either of those events.  #

I didn't believe it was a random event. #

And it turns out, it wasn't! #

Yesterday there was an announcement on TechCrunch that Dropbox is raising money at a jaw-dropping valuation of $5 billion. Hey I knew they were doing good, but.. $5 billion? That's really good. :-) #

Also yesterday, a story on Hacker News asking how much is a user worth? Interesting question. Every user should read this, when you tihnk about how much you're worth to the company who's providing "free" service. When you have an issue, how much listening will you get? No more than what you're worth to the company, or else they're losing money. #

This is, btw, the user-as-hamster business model. The one where you sit in a cage and make the wheels spin around. Either you're watching commercials while doing your workout, or you're generating information about yourself which is used to decide what commercials to show you. Either way, your value to them is a very very small fraction of your value as a human being. And quite a bit less than if you were paying for the service yourself. #

The hamster business model has to be the way Dropbox gets to the $5 billion valuation. Unless a high percentage of their users are paying for the service. I kind of doubt they are. That means they have to be looking inside your box to get the data they're going to aggregate, to get to that astronomical valuation. That's why they didn't just go with the enterprise-y user agreements that Microsoft and Amazon use. They don't want your money. They want the advertisers' money.  #

What's inside your Dropbox says a lot about you. And that, of course, is what Dropbox users (like me) are afraid of. #

Doc Searls wrote a great piece this morning on the commercial-ness of Google. He's in Venice now, with his family, and Google Maps will show him where the nearest McDonald's is, but doesn't tell him the names of the streets. Seems you're a hamster even when you're trying to soak up old culture in the former business capital of the world. There must be a joke in here about the Merchant of Venice, but I can't think of one.  #

The message is very clear. Learn how to set up a server. It's not so hard. And it's worth learning how to do so you can be more than just a hamster. The Internet is a very powerful communication medium, but if you depend on $5 billion companies to give it to you for "free" you're not going to be getting much of the freedom it has to offer. #

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