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How Pinterest Makes Money-N1Gr2DQtpSc

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How Pinterest Makes Money-N1Gr2DQtpSc

Pinterest just went public. At
IPO, it was valued at $10 billion.
So what is Pinterest andhow does it make money?
Pinterest was started in 2010 and it’sthe creation of Ben Silbermann and
Evan Sharp, who areex-Google ex-Facebook techies.
What they created is a social appthat lets folks bookmark images that
they find around the internet.
Pinterest is an online social networkwhere users can bookmark images they
find online by pinning them to theirboards, which can range from recipes,
to weddings, to home remodeling.
Then users can share their boardswith friends or all Pinterest users.
Users find new ideas by followingfriends, influencers and brands, or
simply by searching Pinterest’slarge user base.
Pinterest has 265 million monthly users andit’s a group of users that is mostly women.
So it’s not a very diverse group,but it is pretty favorable for
advertisers who are trying to reachconsumers who are going to spend money.
Pinterest makes money from all thoseusers in one simple way: advertising.
Like most consumer-facing tech companies, Pinterest makes money from
advertisements. So its real challenge inthis space is competing against
Facebook and Google which basicallycontrol the digital advertising market.
Pinterest sells promoted pins to advertisers,making three dollars per user last year.
Advertisers pay for an ad to surfacein their desired audience’s home feed
or at the top of search results.
These promoted pins appear in a varietyof formats: a standard still image
pin, small or large video, apromoted app, or an image slideshow.
Pinterest also has hundreds of retailpartners like Ulta Beauty, Lowe’s
and Wayfair.
Shopping ads invite users to click-to-buyand can appear in users’ feeds
when they’re in oneof those partners’ stores.
For the most part, Pinterest users go on the app when they’re planning some big sort of event.
So maybe they’re doing a houserenovation, they’re planning their wedding,
they’re going on a big trip.
That’s when they turn to use the app.
So it’s not the kind of appthat you open on a daily basis.
However when you are using it, it’sbecause you’re probably very likely to spend money.
Pinterest’s value at IPO is down fromits last private valuation of $12 billion two years ago.
For 2018 Pinterest made about sevenhundred fifty six million dollars in
revenue which is pretty good it’s almostat $1 billion and they’ve shown really good growth.
However in 2015 there were projections that came out that had them making about $2.8 billion in this past year.
So they are making money.
However they haven’t reached the potentialthat some folks thought it had.
Pinterest took off with rapid growth in2012 but expansion has tapered off,
largely because of what employees told CNBCis a work culture that’s slow
when it comes to making decisions.
I spoke with 20 former Pinterest employeesand they described to me the
culture. It’s one where folks arevery nice to each other.
So it’s a very cool place towork, however things get done very
slowly. One former person told me thatit’s done at a glacial pace.
And that’s because rather thangiving folks direct feedback, they’re
essentially just doing meeting after meetingto just get everyone to buy
in on a project beforethey move forward with it.
Pinterest is part of a big waveof tech companies expected to go public this year.
It’s listed as "PINS" onthe New York Stock Exchange.
The thing to take away with Pinterestis that although the company isn’t
growing users or revenue at thefastest pace, they aren’t running into
scandal. They are very deliberate abouteverything that they do and once
they commit to it,they go full force.


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