Google Dropped A Bomb On DropBox

 | Mar 20, 2014 11:10AM ET

Don’t mess with Google (AAPL )iOS. While Google has been tremendously successful in capturing data, selling targeted advertisements, and generally dominating the web they have had a few mishaps along the way. Most notably, Google acquired Motorola for $12.5 billion back in 2011 then sold the handset business to Chinese cell phone producer Leonova in January for less than $3 billion. But that’s not to say the deal was a complete wash, Google did get to keep the majority of Motorola’s patents which help to support the Android operating system.

Next In Line

In Google’s latest cutthroat move they are targeting cloud data storage companies DropBox and Box ahead of what promised to be 2 of the hottest IPOs of the year. In a particularly ruthless move, Google slashed its Google Drive data storage prices last week. Google Drive now offers up to 15GB of cloud data storage for free. Those in need of additional storage can purchase 100GB for $1.99 per month or up to 10TB+ starting at $99.00 per month. For comparison, DropBox only offers 2GB per month for free and a 100GB monthly plan costs $9.99, 5 times as much as Google charges. Box has slightly more competitive pricing, they offer up to 10GB for free and they charge $5.00 for a 100GB monthly plan. The biggest problem for DropBox and Box is that right now cloud data storage is largely a commodity and it’s difficult for these smaller companies to compete with Google at scale. Sorry guys, Google sends their regards. Until other cloud data storage companies can find a way to differentiate their products in a meaningful way there’s really no sense in anyone paying for the smaller guys’ services when Google offers the same thing at a lower price.

How to do you think the price cut will affect Google’s revenue? Will the price cut generate additional business and possibly increase Google’s revenue or is Google just making a power play to keep DropBox and Box down by preventing them from generating the cash they need to compete on a larger scale.

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