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Comment by user24 | Hacker News Reader

I guess it's not related to whether google were wrong to cut off your adwords account or not, but I can't get past the part where you used a free $100 coupon to buy adwords to get referral credit on dropbox instead of paying dropbox for a premium account.

It seems clever, but ultimately dishonest. More dishonest to google than to dropbox I suppose.

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Dropbox wouldn't have made the 10GB/affiliate deal if the trade off of more free storage for more users wasn't profitable. I doubt they care.

Interesting thing about Dropbox is that, owing to their reliance on S3, you estimate pretty accurately what they spend on their users. People who go to extreme lengths to max out their referrals, etc. are outliers. I'd guesstimate the average free account consumes 1gb of overall storage, which costs Dropbox a whopping $0.06 a month. Even those maxed out, 16gb, pay-nothing accounts are charged at $0.80/month. When you consider that a 50gb account goes for $9.99 and costs them $2.75 in raw storage fees (probably less since who uses their full allotment?) you can see how easy it is for them to make money: one paid account subsidizes hundreds of free accounts. Granted this ignores transfer and request costs, so the margins are lower, but even with those, I'd guess they need a ridiculously low conversion rate to turn a profit.

Also, it has been suspected previously on HN that Dropbox have negotiated a better deal since they are apparently Amazon S3's largest customer so your numbers are likely on the high side.

Although account storage overhead could be a large factor (eg full version history with binaries etc)

I don't really know his intentions. It might just have been a way to learn adwords. From Google's point of view, if he really did learn and get good results, then it's likely he will use adwords for another project, and this time paying out of his own pockets.

From Dropbox's point of view, yes people seem to be exploiting them in a way - but I think that the space they give away is not significant to the number of people out there who are doing this marketing for them on their behalf.

This is true. I didn't invent the method but I did do it and it's not as honest to Dropbox as paying them (although I brought them >10 new customers)

To Google though I don't think I did anything wrong: - I learnt adwords and would have considered using it again as I learnt the reach was tremendous for the price. - Even using a coupon, my bidding on adwords keeps the value higher so the overall market price of ads is higher. This has been a theorized reason why $100 Google adwords coupons are so easy to get.

honesty has nothing to do with it..... referral programs are a way of marketing your product..... getting others to do yourmarketingfor you in exchange for something. sometimes cash, in this case axtra services. bringing in new customers is farmorevaluable than one subscription ( as those customers may go the referral route, etc). many online services got hugr this way..... the referral markets are big business.

taking advantageof referral programsis not dishonest unless youaretrying to scam fake referrals or something. referral programs are marketing activities with a calculated cost per acquisition... as long as the referrals met the terms of the referral program, no harm done.

that said, many marketing departments dont think things through thoroughly enough...

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