Facebook acquires file-sharing service Drop.io
Facebook has acquired most of the assets of Drop.io, a New York-based start-up that lets users privately and sporadically share files through a drag-and-drop interface with additional options like phone calls and even faxing, the company announced Friday on its blog.
Context & Ripple Effects
Facebook's purchase of most of Drop.io's assets is, per VentureBeat's same-day coverage, effectively a hire dressed as an acquisition: the prize is founder Sam Lessin, not the drag-and-drop private-sharing product with its phone and fax options. The deal lands during a busy stretch for Facebook, which days earlier launched its Places-powered Deals service and scheduled a mobile-focused event.
For New York's startup scene, a consumer-web company being absorbed wholesale by the largest social network is a marker of where leverage sits in 2010: standalone sharing tools are increasingly valued as talent pipelines for platform builders rather than as businesses in their own right.
First-order effects
- Drop.io's existing users face immediate uncertainty about the service's fate, since only 'most' of the assets moved to Facebook and no continuity commitment was announced alongside the deal.
- Sam Lessin joins Facebook as part of the transaction, giving the company his product experience in private, lightweight sharing at exactly the moment it is expanding into check-in deals and mobile.
Second-order effects
- Independent file-sharing start-ups now compete against social platforms that can absorb the category's best founders rather than out-build them, raising the bar for raising money on sharing tools alone.
- Facebook's own Groups and messaging products become the likely landing spots for private-sharing behavior, letting the company internalize a use case it might otherwise have had to partner for.
Third-order effects
- If the asset-plus-founder structure keeps winning over full acquisitions of operating companies, expect more small consumer web firms to be wound down into platform feature teams — a structural shift toward a few large platforms owning both the products and the people who built them.
The trend: Consumer-web consolidation is shifting from buying companies to buying founders, with social platforms folding independent sharing tools into their own feature roadmaps.