The "viral" point was a good one, and which they solved quite cleverly: as a student I got 10 GB for free, but additional 10 GB for each recruited person. Everyone at campus was on a recruiting spree for a while, to bulk up free storage.

Of course, that doesn't make them money. But millions of users that then had all their files there and kept using it when no longer students (so paying), and recommended it to their places of work etc.