Dropbox is in for a rough ride, as long as they can maintain focus and quality (beat them at customer support, that should be a walk in the park) they'll be the biggest YC exit ever once Google has run its course with the Google Drive.
I'm not sure the file sharing market has such features. I could easily have both Google Drive and Dropbox on my machine. I'd probably end up using the cheaper one more. In the end, I think the consumer will win; capitalism at work. :)
With Dropbox, it seems, to me, like there are much fewer network effects at play. I don't know what percentage of activity on Dropbox involves sharing between Dropbox customers, but I'd guess its low?
I also think its a big deal that I already sign into my Google account on every computer I use; if my files are just going to be there, with my docs, mail and calendar, I'm probably not going to use another service.
Sure, I have a google account. I almost never use it. For me, the epiphany came when my adsense account was suspended years ago. For what I never found out. I appealed and was reinstated. I then pulled adsense from every site. Lesson learned, and I don't need to learn it again.
Google Video preceded Youtube. Google Video was launched before Youtube was even formed as a company. Youtube just straight up out-competed Google Video. Probably being a startup, capable of being naughty[1], staying closer to the copyright infringement line, and being willing to piss of big media companies helped them gain lots of users.
I don't think Dropbox has a parallel advantage in this area. I don't see how being naughty is going to help them in this product area. But of course, they are a talented and focused startup.
Google video was launched on January 25, 2005.[2]
YouTube is a video-sharing website, created by three former PayPal employees in February 2005.[3]
[1] http://paulgraham.com/founders.html [2] http://en.wikipedia.org/wiki/Google_Videos [3] http://en.wikipedia.org/wiki/YouTube
Google changed to copy YouTube's style of video hosting after YouTube already gained traction. The version of Google Videos that people are familiar with came out after YouTube. The version of Google Videos that you're talking about died.
YouTube has a bit of a network effect going on in that viewers want to go where they think the videos will be and people want to upload where they think the viewers will be. I don't (personally) use dropbox in a manner that has any network effects. I basically use it to sync files between multiple computers that I own.
If most people are using Dropbox in a way that doesn't take advantage of other people also using the service, Google could make good entry.
Also, you mention Google Video as a space that Google entered against competitors, failed, and bought the largest. However, that isn't always the case. "We've seen this before. It was called Gmail. In the end they ended up taking most of the new signups away from Hotmail and Yahoo." The distinction between those two situations is important. Was it that Google was facing off against competitors that had rested on a mediocre product while Dropbox is still making their product awesome? Was it that Google was able to (though Ajax) provide something inherently superior while this new Google storage will be at best a clone of Dropbox?
I don't think Dropbox provides as much lock-in as email or online video. If Google introduces this tomorrow, I can easily copy the contents of my Dropbox into it and see if I like using it. If they provide something superior, it's easy for me to switch. I've used Dropbox since early on and been a huge advocate of it at my workplace and to my friends. I do have a certain loyalty to a product that's been around, is reliable, and I trust. Still, that isn't the kind of lock-in that YouTube or email have.
At the same time Dropbox is more like YouTube in that it's a company that creating something good that people love to use. The argument could be made that Google disrupts best where competitors are lax - text ads, search, email, maps. They disrupt products that people use to get to an end, but don't enjoy the means. With Dropbox, I don't see how Google can make it significantly more compelling and it seems like they're resorting to more storage. I love the Dropbox model of having a sync'd folder and whenever someone tries to do something more complex, it leaves me with less joy.
I guess my question would be: what makes Dropbox like YouTube and not like Yahoo? Is the lock-in (or lack thereof) not an issue? Is the crux that Dropbox is an innovator making things people love rather than taking a "that'll do" attitude?
Also, would require to be quite certain Google's software works as well as Dropbox's does.
They're doing the right thing by keeping it simple as long as they can but I'm fairly sure they're savvy enough to have brainstormed each and every bit that they could add / leave out and their decisions so far have been to keep it lean.
It's smart because that way the bandwidth bill on the free tier is still within bounds, as soon as they pull out all the stops they can go head to head with any content store on the net based on the files they already have in their inventory.
I'm in no way privy to anything going on at dropbox and I have no stake in the outcome but if I were running a service and a formidable competitor announced their entry into my little empire I'd be gearing up for war.
Similar to email vs. Facebook, while there are lots of files people want to share, the reality is that _most_ content individual to users (i.e. not music downloads or software packages) is fairly private stuff.
(I'm very restrictive when i do have to login. I do what i'm there for. Nothing else. Then quickly logout.)