Dropbox buys Audiogalaxy: next up, a cloud music service?
Dropbox has acquired Seattle-based music startup Audiogalaxy, according to a post on the Audiogalaxy blog. Details of the transaction haven't been released, but it looks like an acqui-hire that could get the Dropbox team some serious media smarts.
Context & Ripple Effects
This is Dropbox's second talent-driven buy of 2012, following February's acquisition of Cove, which brought former Facebook engineers Ruchi Sanghvi and Aditya Agarwal in-house. Audiogalaxy, a Seattle startup whose product synced personal music libraries to the cloud, gives the company a team with direct media experience instead.
The pickup was thin beyond the announcement itself — confirmation came via the Audiogalaxy blog, with terms undisclosed — but it lands at a moment when Dropbox has been shoring up its position on multiple fronts: doubling Pro storage in July as competition with Box.net heats up, testing two-step verification after a July spam incident, and opening its platform to developers with the Chooser attach button in November.
First-order effects
- Audiogalaxy's Seattle team joins Dropbox as an acqui-hire, ending the startup's run as an independent music-syncing service and giving Dropbox in-house expertise in streaming and library management.
- The rumored cloud music direction remains unconfirmed — no product or terms were announced — so the immediate change is personnel, not a shipped feature.
Second-order effects
- If the media expertise turns into a music offering, it would give Dropbox a differentiated layer on top of storage just as rivals like Box.net force it to compete on raw capacity and price, as the July Pro storage doubling showed.
- A consumer media play would also extend the platform strategy begun with November's Chooser tool, giving third-party web apps more reasons to build on Dropbox rather than rival storage.
Third-order effects
- The pattern — small acqui-hires layered onto a commodity infrastructure base, as with Cove earlier in 2012 — points to storage providers evolving into feature-rich consumer platforms assembled through talent deals rather than internal roadmaps alone.
- For small media startups, being acquired for their teams rather than their products becomes a viable exit path, reinforcing the acqui-hire market that defined this era of consolidation.
The trend: Cloud storage companies are using serial acqui-hires to bolt media and productivity layers onto commoditized file sync, turning single-purpose startups into platform feature teams.