#Pinterest Seeks to Raise Its Valuation from $1.5 Billion to $2.5 Billion

What a difference a little more than 18 months can make.  In May of 2012 Pinterest was valued at $1.5 billion, enabling them to raise over $100 million in capital.  Since then the company and its user base have grown by leaps and bounds.  In December of 2011, prior to the first valuation, Pinterest had 9 million users.  As of December of 2012, the user base has exploded to 48 million.  Over the course of the year, the company has also increased their employee ranks by the same factor of 5, growing from 20 employees early last year to 100 today.  In order to provide more space for the needs of the growing company, Pinterest also relocated it’s headquarters to a 58,000-square-foot space in San Francisco.


According to the write up in the Wall Street Journal:

Now Pinterest has reached a point where it can start to make revenue a priority. The company is now studying a potential advertising system. It is also building up its relationships with businesses to learn how Pinterest traffic can eventually convert to sales of goods, from which the startup may eventually be able to take a cut.

In order to take the next logical steps, Pinterest is currently negotiating a fresh capital infusion and hopes to be valued between $2 and $2.5 billion.  But with the slide in value of Facebook, Zynga, and Groupon, is yet another social site really capable of raising the kind of revenue worth such an investment?  Some believe that it is.

The same WSJ article cited these examples:

Last Cyber Monday the number of referrals that came from Pinterest more than doubled from the year-ago period, according to a report by Adobe Systems. Referrals from Facebook and Twitter Inc. were flat, and other social media services saw a 50% decline in referrals, the report said.

Businesses said they also have gravitated to Pinterest because “pinned” content has a different life cycle than what is posted on Facebook and Twitter. Brian Madden. executive director of social media for Hearst Corp.’s Hearst Digital Media, said content that Hearst puts onto Pinterest can resurface months later when people continue to discover it. In contrast, posts on Facebook and Twitter tweets produce “a lot of initial interaction” before fading.

“The longevity of content [on Pinterest] is very valuable to us,” said Mr. Madden. He adds that in December, Hearst got more online traffic through Pinterest than Facebook and Twitter combined. Overall, 3% to 5% of traffic to Hearst’s various brands was through Pinterest that month, with about 1.5% from Facebook and 1.5% from Twitter, Hearst said.

 Image Courtesy Mashable.com

Michelle Stinson Ross

Michelle Stinson Ross

Content & Outreach Goddess at AuthorityLabs
Michelle Stinson Ross is a digital marketing industry recognized authority on the outreach power of social media. She has worked as a community manager and consultant for several brands to increase brand awareness, raise the visibility of special promotions, and train their teams to use the social space to connect with media influencers and the public. Michelle is part of the marketing team at AuthorityLabs and co-hosts #SocialChat, a Twitter based live chat that covers a variety of topics geared toward social media marketing (Mondays at 9 p.m. ET). Her passion for social media marketing has made her a regular conference speaker at events like ClickZ Live, and Search Marketing Expo. She has also been a featured guest on Webmaster Radio and several industry Hangouts on Air.
Michelle Stinson Ross
Michelle Stinson Ross