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Pinterest Raises $150M at 2015 Share Price (bloomberg.com)
214 points by jasondc on June 6, 2017 | hide | past | favorite | 101 comments

I've been a fan of Pinterest for a long time, though I rarely use it these days.

I've been fascinated, and slightly horrified, by their pivot away from social functionality and towards a vision of a neutral bookmarking site.

It's not that I'd want Pinterest to be more social in and as an end itself, but rather because I think it better incentivizes people to create good quality content, and it makes it easier to discover things I want to find.

There's very little ROI for cultivating a public image on Pinterest, so few people put much effort into doing it. At the same time, people who have taste similar to mine are a much better way to find things than any algorithm Pinterest has ever released. And yet, they keep emphasizing algorithmic recommendations while disincentivizing people from publicly expressing their taste and making it harder for me to follow people I like.

And then there are the ads, which, as a bunch of other commenters have pointed out, tend to be really far out of line from anything I've ever expressed interest in. It's just off-putting to see a bunch of low-quality ads for tacky crap in the middle of my feed of minimalist interiors.

Maybe they have something up their sleeves, or maybe I'm very different from their target user. Otherwise I just don't agree with their product direction.

>And then there are the ads, which, as a bunch of other commenters have pointed out, tend to be really far out of line from anything I've ever expressed interest in. It's just off-putting to see a bunch of low-quality ads for tacky crap in the middle of my feed of minimalist interiors.

This seems likely to be an inventory issue more than anything else. Fine-grained targeting requires fine-grained ads which requires a sub-linearly scaling sales team.

Well, it's hard to get good advertisers when the ROI isn't there.

It's not something you'll hear unless you're in the know, but there is a pretty high level of animosity towards Pinterest in most retail marketing departments. I love Pinterest, so it was surprising to learn when we started this work, but it boils down to: 1) traffic from Pinterest ads show very poor quality / engagement. 2) Pinterest has not been a good partner - they've actively "snubbed" a number of big labels. There are even a few major retailers who "deleted their Pinterest". 3) Organic Pinterest basically doesn't work, so they won't even put an intern part time onto managing their Pinterest account. Even one of their top retailers, Nordstrom, appears to use a bot to post to their account.

When your ad dollars don't show ROI, people spend elsewhere. And if your main customers aren't engaging your platform, that's definitely trouble too.

If Pinterest ads don't show ROI why is their revenue growing? People say the adboard is full of diet, teeth whitening, fidget spinners, these campaigns are all about a ROI or otherwise they wouldn't exist.

So yeah, a ton of fear mongering on here. I'm long on Pinterest.

Email spam also has ROI, for products even less serious than the worst you find on Pintrest. It only takes a very few to make it worthwhile. But the users that don't buy might be more inclined to leave the platform if ads are too invasive and low quality.

That is an entirely different argument and one easily refuted by the fact that Facebook has thrived even when the base of their ad revenues is built on scammy ad campaigns.

On the other hand, people "need" to be on Facebook, and have needed to since before some of the worst of the ads.

But their non scammy ads return positive ROI, which brings advertisers back.

"..people who have taste similar to mine are a much better way to find things than any algorithm Pinterest has ever released"

Yep, I could not have said it better. Pinterest is now intent on serving us up predigested pap, while at the same time serving us up more literally to advertisers. Item: It's impossible now to discover who else likes a pin that you love. It's bewildering, it's a sea-change, and it effectively renders Pinterest useless to me now.

If they want to be a bookmarking site that also recommends items, they need a way to unequivocally say, "I'm not interest". I get wood working an fashion recommendations. Then one day at the height of Zootopia they recommended some comics based on the story. Tried to figure out how to say no. Apparently I missed. Now I get Zootopia every 5th recommendation.

How much of that is Pinterest trying to surface something incorrectly based on their matching algorithms, vs. the people advertising Zootopia using poorly-chosen or intentionally broad targeting settings?

I have no idea. But it's taking a Fury twist and I just don't want that.

How do you mean?

Sex and abortion.

Yes, I always placed Pinterest at the same end of the spectrum as Etsy.

I get wood working on fashion recommendations, too.

oh man, nice

Ads will likely improve over time. Remember when Facebook was filled with "one weird tip" ads?

My bigger concern is yours, that Pinterest will lose its human touch by removing social features. The new tried-it feature seems like a promising new foray into making Pinterest social again in a way that's uniquely Pinterest. Time will tell.

>disincentivizing people from publicly expressing their taste and making it harder for me to follow people I like.

"There isn’t a user-generated component on the platform, so people aren’t here to learn about what they’re friends are doing. They’re there to plan their lives. And people plan their lives through content that brands produce.” Tim Kendall https://www.fastcompany.com/40428266/pinterest-just-launched...

> "And people plan their lives through content that brands produce"

This sounds completely wrong to me...

However, I know I'm at least somewhat atypical in my spending habits & life planning, so it's hard for me to judge.

Algorithmic seems more amendable to monetization than user-submitted. If nobody knows the algorithm (and supposing they can get one working well), then nobody knows how if {new movie X} pops up organically or because its production company spent advertising budget to make that happen.

I watched this really interesting mico-documentary just last night - I think you'd like it...


I just started looking at Pinterest as a company to work for. From the outside, the way they treat their employees looks amazing. Things like KnitCon (an internal conference for employees led by employees) reflect well on the company. On the other hand, some of the reviews on Glassdoor are not so kind.

I hope Pinterest can succeed and overcome its current challenges. Even if I do not ever get a job there, what is good for one company lifts everyone else in our industry (unless you are a direct competitor!)

Just keep in mind they are a company like any other at the end of the day. They look at bottom line, revenue and how to keep shareholders happy.

HR Managers can outsmart each other day and night on how to make it more funny, bubbly, friendly, etc to you by pulling off more and more crazy ideas to make you feel like we're one big family, but when shareholders decide to cut corners, don't be surprised that your key-card and password doesn't work, and you are greeted by a large-sized man in dark suit you never met before who will gladly escort you and your cartoon box of your office belongings outside. Oh and don't email HR questions like "What happened, I thought we are one big family, so you told me", because for legal reasons you will not get any response at all!

Source: own experience :)

> Things like KnitCon (an internal conference for employees led by employees)

Who else but the employees of a company would lead an internal conference?

Perhaps a lot of it has got to do with the personality of the founder: https://www.theguardian.com/technology/2014/apr/05/pinterest...

Knitcon founder here; happy to chat with anyone thinking about taking a job at Pinterest. It's been pretty amazing so far.

I've started to use pintrest a lot lately (finding ideas for some DIY furniture). I actually kind of like the product for discovery. I haven't pinned items from other sites, just saved items from other people's boards.

My biggest qualm is the number of low quality ads. Ton of stuff for diet drinks, teeth whitening, skin cream and the like. And fidget spinners, lots of fidget spinning ads. Perhaps I haven't used the app enough to get more personalized ads, but I do hope the side of the service improves.

This seems to be a pretty common trend with ad platforms. They start with the "dregs" (ie. diet stuff, teeth whitening, questionable beauty products, guru info products, etc.) and then leverage the revenue and benchmarks from that to ladder up and sell into larger more reputable brands. This is typically the case when there is strong direct response potential from the channel.

Once they gain major brand traction, there seems to be a big shift to catering more towards the big brands who care more about impressions and less about direct response, and who are fine paying very frothy CPMs for it. This typically coincides with a purging of the "lower quality" advertisers whom the big brands don't want to see their ads next to.

Happened with Google, Facebook, etc., so not really surprised to see it happening here with Pinterest.

This is exactly what happened with the platforms you mentioned. Affiliates and other direct response advertisers are willing to take a chance on a new ad platform because the costs are generally low, and the returns can be really good.

Then, once the big brands come to play, the platforms change what ads are deemed acceptable and start kicking off those that started out using the platform.

You nailed it.

Yeah, I mean, it isn't really a secret in the digital media or affiliate space. Since I do this for a living, I tend to keep my eye on where affiliates are gravitating towards with their media and marketing efforts. It can sometimes be an early signal of where to test.

But that totally depends on the brand tolerance for it. For example, if you are a big family brand, you're not going to be an early adopter of Outbrain and Taboola type stuff if your adjacent ads are acai berry drinks, colon cleanse kits, etc. that all link to flogs and fake news sites because the network might be turning a blind eye to quality at that stage of things.

And the way the purging happens is pretty interesting too. Typically it comes in the form of new policies. I forget what the wording was at the time, but I recall when FB started making the shift, some of their policy wording and examples was so obviously targeting recent things affiliates had been doing on the platform it made me laugh. Even reading through their current policy site's prohibited list is pretty much a checklist of every major affiliate category there is.

I've used Pinterest for a couple of years or more to save images of cars, motorcycles and houses and the ads are just as terrible for me. I almost never get on there anymore because of the garbage they are pushing on me. Just not interested and it ruins the entire experience to have to wade through these terrible ads that have nothing to do with how I use the product (or anything else related to my life).


The suggested pins for me are just as irrelevant. I spent quite a bit of time marking each irrelevant pin and ad as such, but it didn't seem to help. I finally turned off suggested pins, but ads aren't optional.

I feel like ads on all of the big platforms started out as bad/irrelevant/spammy. They've typically gotten better over time as inventory improves but then again ads are in general spammy by definition.

> I finally turned off suggested pins, but ads aren't optional.

Well, technically you can always install an ad blocker.

I've got uBlock origin, but it doesn't block anything on Pinterest. That brings up a good point... on Pinterest it is hard to tell what is and isn't an ad because the only differentiator is the text below that reads "promoted by...". Everything else looks like a normal pin, except usually the content doesn't make any sense with my feed so I think look to see who is posting garbage so I can unfollow them and usually it turns out to be an ad.

I think if they focus on bringing in more content creators, especially people who produce and find niche stuff and keep working to improve their discovery capabilities, they can forge their space without fear competition from Instagram, which has launched an option To save things. I was recently looking for burnt cement floor and I had a better search experience than using google.

If not on Pinterest it's very annoying searching for things like you describe. A vast portion of the images you find can't be viewed in decent resolution without signing up to Pinterest.

It's so bizarre, seeing how pinterest screams for some sort of machine learning image matching ad system, combined with direct buy buttons for the stuff in the pictures.

Pinterest really dropped the ball, they could have been a super profitable social network.

A lot has been written about how people go on Pinterest with shopping intent. It's a way to window shop the entire internet, curated by friends. They never really monetized it much though. Individual influencers made money by leveraging referral programs.

It seems like Pinterest was way ahead of the curve when it came to having image-heavy content and a heavy focus on lifestyle products. But they missed the boat on video and a lot of the influencers moved to Instagram or Facebook.

How is a $12 billion valuation dropping the ball. Pinterest appeals to a very lucrative democratic who are looking for stuff to buy, such as clothes, household products, and other stuff, whereas people go to Facebook to see pictures of family or engage in political gossip.

For fashion, afaik "influencers" are indeed using platforms like Instagram much more than Pinterest. That is certainly a situation where they could have defended their turf more effectively.

but Instagram is more for browsing than buying . people who use pinterest are more in a buying mood

I'd tend to disagree. Both are for browsing.

If I see something on Pinterest I'm interested in, then I'll go to Amazon to see if it's offered there, and if not, I'll head over to Google to see if I can get it cheaper. I'm not going to buy directly from Pinterest unless it's a link directly to Amazon.

Even if they weren't able to raise their valuation, 12B is not too shabby

One major issue is that their ad unit is "Google/Bing shopping ads, but lower quality and at a comparable price."

They are also people who actively hate "social networking" and just want to collect some visual inspirations without being fed with a bunch of advertisements. Thank you.

Sure, but you're not the one paying the bills. You're either the customer or the product.

This is true but I think pinterest and reddit have a similar problem where they really can't make their userbase too mad at them and they could either stunt their growth or users will jump ship. Either that or its the guiding philosophy to not make their userbase mad.

I feel like you're missing the entire point of how a social network site works and makes money

Any idea why they never integrated any ecommerce functionality? I mean Instagram (finally) does sort of this with the „Swipe Up“ feature for selected creators in Instagram Stories.

They've had "Buyable Pins" since 2015. https://business.pinterest.com/en/buyable-pins

Ha nice...never seen a single one in the wild...they probably filter by location (me: EU).

They tried skimlinks, and some of the users were loud and vocally against it.

IMO Pinterest should have had skimlinks for everyone, and a PinterestPro for the "influencers".

In the early 2010s there was another site called Svpply that did the same thing. eBay ended up acquiring them. My impression was that all these sites were inspired by the original idea of ffffound.


Yeah the whole LuLaRoe phenomenon should be pinterest dominated but instead it is Facebook/instagram.

The thing that really puts me off Pinterest is that they require you to log in to see their public pages.

I'm surprised that people would throw another $150M on this particular bonfire. Like so many other bookmarking sites before it, Pinterest is overreaching. Their best outcome (for investors, not users) is likely an acquisition by Facebook.

I have the same issue with Quora. Makes me sad every time I go there and find useful info, but feel pushed away. Dropbox also does similar -- in fact they broke all their old direct public links, so that you can use their new "sharing" dialog, so that they can spam the recipient to get a Dropbox account. Sigh.

Worry not, I'm slowly assembling a massive Quora WARC file of all of the posts uncensored by the login wall (for cold storage). The moment they're out of business, a magnet torrent will be provided.

Is this the explanation for your account name? ;-)

Actually, it is!

I'm notorious for taking on too many projects. Time to sleep when I'm dead.

Seems like kind of a paradox. Too much to do, so you'll sleep when you're dead. But sleep deprivation will kill you, so you won't be able to finish all those things that are keeping you busy. :)

I always get eight hours of sleep ;) if a project exceeds my time availability, and cannot be automated, I delegate, even if it requires paying out of my pocket.

Thats way more than my usual 4-6 :-)

I guess I should but I also love to have some time alone before the rest of my family wakes up (and before people turn up at work).

Thanks for doing this! There are so many people putting so much effort in writing detailed Quora answers on such a wide range of topics. All of that content disappearing whenever Quora inevitably shuts down/gets acquired would be akin to a library burning down.

Would you mind sharing your spider technology stack. How do you find new urls efficiently? What spider and what storage do you use? Do you append everything in one WARC file and split it if it gets too big?

Can you add ?share=1 to your spider to get all Quora's content?

That's what I do.

Sounds like someone who is trying to drive the price of Pinterest down for future acquisition.

I am more annoyed they pollute too many searches I make, there are a few sites which I would love to permanently exclude from searching and this is number one

Yeah, I always search with -site:pinterest.* (text so the star after the dot is not parsed).

Yeah, it really strikes me as unnecessary. Get me interested in using the site, and I'll willingly and happily create an account. Make me feel like my arm is being twisted for no good reason, and I'll walk (or run) away.

The only explanation I can think of for required login is that their primary performance metric (eg to investors) is monthly actives and they're worried that anonymous flyby visitors will muck up their numbers.

I don't know why they can't carry on doing just what they do now. Keep the servers going, apply security updates, do backups, etc. But why do they need new features?

This constant need to grow really irks me.

They could. They should get to $1-$2 billion in sales and print a Facebook-like margin at 30% net income margins by keeping operations as slim as possible. Decent growth, 40 PE with a public listing (for however long this market stays up), $300m in net income on $1.2 billion in sales, $12 billion market cap. That'd be a real, sustainable business.

That's what Twitter should have done as well. Pinterest won't do it, for the same exact reason Twitter didn't, making the same business mistake with predictable consequences. They all want to be the next goliath and none of them are going to be (and when that reality sets in, they all become reactionaries under pressure from a dozen angles, working from a position of weakness).

Yes, compare this response to Craigslist. The latter is downright successful, dominating and print money for everyone involved.

what do you think is the reason that twitter/pinterest didn't/won't run a lean operation, and why did they choose that path?

There are two types of growth, one that should irk, and the other that should not:

1) Growing for the sake of growth - buying users, anti-user lock-in features, dark patterns, etc.

2) Growing as technology improves - the cost of creating/publishing videos has decline massively in the last few years for the average user, thus products that utilize video to create better experiences should be built.

Because they took a lot of VC money.

"Do not attempt to compete with Pinboard."

2026: Pinboard acquires Pinterest

Twitter is currently trading for $12.7 billion. They did $2.5 billion in sales last year.

Pinterest has a: show me the sales, problem, I suspect. Public comparables in social like Twitter & Snapchat are going to cap their upside until or unless Pinterest can somehow demonstrate a very profitable business model. If those margins never arrive, Pinterest is going to be worth something a lot closer to Yelp than Twitter. From $12 billion, there's a massive downside risk in the last few rounds for Pinterest investors if this gets a similar reality chopping to what Twitter & Snap have.

Wait, so Pinterest is about as valuable as Twitter? That makes no sense. Twitter is everywhere - it's how people communicate with the damn President of the United States of America for crying out loud. Twitter and Facebook are really the only big worldwide social networks: everything else is localized, or too small. There's massive value from that alone.

Meanwhile Pinterest... well, maybe they have a lot of interior decorating collections and cupcake ideas, but there's also a ton of spam and most people I know that used it years ago don't use it now.

How are the two even close?

Twitter is 11 years old and has never made a profit even though it's been publicly traded for 4 years. It has 330M MAUs but its growth has stalled.

Pinterest is 7 years old, has close to 200M MAUs, and is still growing at a good enough pace for investors to justify this kind of valuation. Pinterest also excels in huge markets which you are probably not familiar with: recipes, weddings, fashion, and interior design.

Even though most people you know don't use it, there are still 200+ million people out there in other demographics that do use it. Probably a lot of them have never heard of Twitter :-D.

FWIW I think Twitter is undervalued as well.

I'm actually one of the few percent of Pinterest users that are men, and I have used it for years for exactly those kinds of things: recipes, fashion (to some extent) and interior design. But these days I'm finding that it's much easier to just use the rest of the web. There's so much spam, and noise, repeated crap, and things which make nice pictures that would never work in real life.

What I have no idea about is how Pinterest will make money. Ultimately, Twitter could continue for years without making money, and there are a number of things they can charge for (larger tweets, a Pro service, tweet pipeline, user data, faster access to Tweets) (perhaps sell Trump's tweets to HFT firms, 500ms before the rest of the world sees them?) Meanwhile, Pinterest is full of shitty ads if you turn off your uBlock, and the only other revenue stream I can think of is Amazon affiliate stuff, which has probably dried up now that Amazon turned off that pipe.

I have the exact opposite view. Fundamentally, many people look at Pinterest for ideas about stuff they want to buy - that's usually the perfect spot to be if you want to make money on advertising.

If anything, just seems like Pinterest has big execution problems more than business-model problems.

500ms is nowhere near enough to discern the necessary qualitative insight (or lack thereof) from Trump tweets and translate it to quantitative arbitrage.

It seems that Pinterest has had at at least three distinct revenue sources to date.

1. Commission earnings from inserting their own affiliate identifier into pins to things on Amazon. I'm not aware of what other sites they earn commission from, but that has probably dried up some as Amazon's commission structure changed. Notably they now allow users to post/pin things with links containing user's affiliate code.

2. Paid promotion for user pins, something in between "native ads" and "search ads". Pretty common for anything that might be considered a marketplace, but it works on Pinterest I guess.

3. Sponsored video content to play along paid promoted pins, not unlike Snapchat's corp paid video content.

4. ???

They do, and they also have something Twitter typically does not, which is purchase intent. Lots of people go go Pinterest because they are looking for ideas on something to buy. If they can find it and purchase it all in one place, that makes Pinterest valuable from a direct response marketing standpoint.

Also, Pinterest's demographics are VERY desirable to marketers.

"Pinboard acquires Pinterest for $35k"

I see parallels in pinboard and craigslist - both not so technologically awesome, but good enough

Yes. I think it's a part of a software art to just build a no-bloat functionality and leave it like that for a long time.

So is this perceived as a lateral move? Or is this a strong negative indicator.

Hard to imagine somoene seeing this as anything but negative. It's like a stock not gaining at all in two years and then suddenly asking someone to buy a whole bunch of it.

It's hard to say without seeing the terms, but raising money is not quite like selling a bunch of stock. The money probably comes with a bunch of terms, and if it's effectively a down round the terms are probably incredibly terrible for the company's existing investors.

I'm shocked how Pintrest gets away with spamming Google images with dead end links to sign up forms as an on-boarding mechanism.

I search images these days and I click a result only to be thrown into a Pintrest on-boarding flow and unable to get the image I wanted.

Honestly think they should be banned from Image Search results.

I was one of their biggest supporters until they set up a registration wall and increased their targeting outside the site.

I thought one of the best use cases was as a wishlist, but that's not gonna work with a registration wall.

When aliens deign to view us they will see a society which has recently taken the fetish of (targeted) advertising to new heights, possibly above the actual production of products and services which to advertise.

This title made me think they had a down round...

Well this is kinda flat round, and it casts a negative outlook on the company.

Haven't heard of Pinterest in a lo-ong time. I guess it still exists?

Does this new round have the same preferences that the 2015 round had?

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