Pinterest Raises $367M at $11B valuation

If YouTube can increase ad prices without losing advertisers, why aren't they doing that now?

> where a very significant amount of usage has almost direct purchase intent.

But how do you know that it isn't actually 99% window-shopping and fantasy, until you actually put the theory into action?

Twitter, Facebook, Instagram are good examples.

I'm not complaining about anything. I'm saying perhaps we overvalue marketing in general.

I get the feeling no matter what comparison I make, you'd call it misleading, because that's really splitting at hairs. The thrust of the comment and the point of referencing Armenia's GDP was the scale of the figures. I've now edited it out since apparently nobody can address my point without slapping around the GDP comparison, as if it's important I get every word of my comment exactly right regardless of the point.

Imagine what the $11 billion one would spend to purchase Pinterest could do in other areas, such as the developing world, our inner cities, public infrastructure. That's the point. Is that up front enough and leading you in the right direction, or am I still being misleading?

Put another way, why do we value an online marketing tool at $11 billion and people efforting some real change like feeding starving children have to struggle for a meager five figure grant? And why are people here so hell-bent on feeding into it and silencing people like me who just have questions about it? Am I the only one that has ethical questions about spending my engineering career contributing to a market that values image distribution to push products and fuel consumerism at about the same order of magnitude as SpaceX?

You can look at me with a straight face and say that Pinterest deserves to be valued at $11 billion for what, its user count? Its potential to open up new revenue streams for advertisers? Same with Snapchat, same with Instagram. I feel like our priorities are broken, and that's all I'm saying, and as much as all of my comments are flirting with being grayed out, it feels pretty hopeless and depressing to be the only one, apparently.

You should run away from any company where "founders, employees, and investors" regard an IPO as the finish line. Run away as fast as you can.

You attended the weddings as a guest? Brides and grooms and wedding planners and venues make extensive use of Pinterest. Pinterest is brilliant for that kind of thing. You probably don't see that as a guest.

I'm referring to brides using Pinterest as a planning tool (before the wedding).

I can't believe you just asked me for a study based on that comment (where "every" is clearly hyperbole). Let me Google it for you (EVERYone uses Google).

Look at that ... 70% of women use it for wedding planning BEFORE EVEN GETTING ENGAGED

http://www.huffingtonpost.com/2014/07/25/wedding-survey_n_56...

I'm not sure you understand what "uses Pinterest" means.

Brides typically use it to decide what they should wear, what their wedding party should wear, and what decor should be used at their reception etc. See for example [1],[2]. Note that [2] has 4 million followers, for that board alone.

If it's studies you want, then something like [3] shows just how much traffic Pinterest drives: much, much more than Twitter, and second only to Facebook in terms of social sources.

It's not typically used as an organization tool in itself.

[1] https://www.pinterest.com/categories/weddings/

[2] https://www.pinterest.com/explore/wedding-ideas/

[3] http://www.businessnewsdaily.com/7356-social-media-marketing...

Sure am tired of seeing that comment everywhere!

When $111 billion and $11 billion both make sense, neither do.

I appreciate that, and you did identify it, but when you're talking about valuations, of course it makes the meta-commentary less valid not to mention any numbers at all! you have to talk about numbers, because otherwise what I said applies - i.e. why are they selling stock at 9 cents on the dollar in this round?

Conventional wisdom is that an employee costs the company twice their salary (insurance, facilities, etc.) So it's closer to $1 billion.

I saw this type of statement a lot by Facebook doubters (it could never make money, it would never have real sales, it had no business model, etc).

Let me check Facebook's last fiscal year.

$12.4 billion sales; $2.9 billion profit

Could Pinterest reach $5 billion in sales and $1 billion in net income based on what they're capable of in the next five or six years when it comes to traffic and the obvious monetization? Yes, and it would make the present valuation dirt cheap.

Twitter just turned on their revenue machine two years ago, and they're already at $500m a quarter. They too supposedly had questionable business potential.

I think it's less then that. Pinterest's early days were rough, and I heard that their B or C round was on unfavorable terms just to keep the lights on before they blew up.

Anyone know if the founders took any money off the table?

> Best case scenario would be: 33% * (75% angel) * (75% series A) * (75% series B) * (85% series C) * (95%^4 Series D-G) = ~10%

Doesn't this assume that the earlier investors either didn't get pro rata rights (unlikely) or didn't choose to exercise them (conceivable for later rounds)?

Delicious never acquired a truly mass audience, they never got out of the niche of traditional bookmarks as far as their peak audience days were concerned.

I'd say Pinterest has a few strong things in its favor: 1) it benefits from network effects, beyond anything Delicious saw; 2) people accumulate value in their use of the site, to leave is to abandon that effort; 3) they have a national (early global) brand, whereas most people never heard of Delicious 4) they dominate a demographic that is extremely valuable in line with their monetization plans, Delicious had nothing like it 5) Delicious was founded in 2003, the Pinterest scale potential in 2015 is drastically larger, with mobile opening a global audience of a billion potential users

It's also worth noting that bookmarked web sites rot, disappear, etc. Being able to visually go back and look at concepts, ideas, inspiration - is far more useful over the long haul (eg after three years of content accumulation as a user).

That's always a possibility, but I think at this point it would be just as hard to dethrone Pinterest. A lot of the content on Pinterest is pinned from within the site itself. I dunno what the percentage is, but most people I see that use Pinterest are usually just browsing their feed which is made up of pins from the people they follow (and the topics they are interested in). You also have to consider the amount of time that people invest into creating their boards and organizing all of their content. My sister has somewhere close to 20,000 pins now organized into very specific boards. She also has hundreds of followers and follows a ton of people.

Less of a network effect than Facebook, I would think, because most users of Pinterest are pure content consumers, rather than hybrid content producers/consumers.

That said, they have a very large library of existing content, a large number of producers who have devoted a fairly large amount of time to Pinterest, and also... a space in which it would be hard to distinguish yourself by pure feature competition. How do you make a website that is substantially better than Pinterest at showing pictures and letting people bookmark them? If you create incrementally better search/recommendation technology, I think it would be hard to communicate your tech advantage to the average user, particularly before you develop a deep content library.

They have some decent network effects. People follow each other and there are curated boards that are almost sub-brands on their own.

There have been some fairly well funded attempts to build a competitor (eg, Fab at one point tried it), but nothing really got close.

It's probably not as sticky as Facebook, but OTOH there's a lot more purchase intent.