AOL has announced that it will shut down its web-based storage and file sharing platform XDrive. Techcrunch is reporting that the Internet giant decided to rid itself of XDrive because of its simply to costly and not easily monetizable through advertising. The blog has an email from AOL EVP Kevin Conroy, who amongst other things writes:

"To effectively grow the XDrive online storage business we would need to focus on subscription revenues vs. monetizing through advertising revenue, and this business model is not in strategic alignment with our company’s goals."


Conroy says users will be given the option to migrate their data to other platforms, which could be good news for online storage companies like Box.net. Of course, it doesn't solve a general problem of personal storage and file sharing platforms: They're hard to monetize - a lesson that Allpeers, Tubesnow and a few others have already learned the hard way.

AOL will also be shutting down the image hosting service AOL Pictures and Bluestring.com, a personal media sharing platform that only launched some seven months ago and that I personally had never even heard of. Writes Conroy:

"These consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation."


Update: Box.net is now offering an automatic backup tool for XDrive users.

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