Ronnie05's Blog

Online storage providers shutting down operations

Posted in Value added services and applications by Manas Ganguly on February 6, 2009

In what is seen as desperate move to trim portfolio and cut costs, AoL and now Yahoo are shutting down their online storage applications. Consider this: Yahoo Briefcase was Yahoo’s 10 year old online storage program. However, it never gained as much traction as Yahoo mail, messenger or Flickr. Within days of taking over, Yahoo CEO Carol Bartz has issued a March 30 Deadline to take Yahoo Briefcase out. More pay offs, Pay cuts and salary freezes are expected from Yahoo on the employee account as well. Aol XDrive will see the “sunset” according to its EVP, Kevin Conroy. Quoting Conroy, “consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation..”. Interestingly while Flickr is Yahoo’s blue eyed baby, the same service from AOL, AOL pictures will be facing closure! Analysts cite following reasons behind the “curtains down” on these free online storage applications: 1. The revenue from online advertising will not sustain the storage businesses on a stand alone basis. Thus these services are considered to be a drag on the P&L accounts of the company. 2. The cost of maintaining several backups of server files is the reason for these companies to reel under such severe pain. 3. Increased competition from MSN Sky drive and new age sites ziddu, megaupload, 4 shared! 4. People are accessing online storage sites through variety of softwares thus the decline in page views is further putting pressure on advertising dollars 5. Legal cost of suits because of illegal activities and misuse by members! The implication for consumers is that next time you have to choose a storage site, please look for a reliable one else you would be shuffling around site to site as one after another storage sites shut down!

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