# Pinterest Company Analysis

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## Pinterest Financial Data

Pinterest had estimated revenue of \$755.93 million in 2018.

### Market Share of Pinterest

• According to the market share data of social media sites highlighted by StatCounter Global Stats, Pinterest currently has a global market share of 13.16%. The company comes second after Facebook, which has a market share of 73.1%.

### Other Social Media Platforms that Compete with Pinterest in the Market Include:

• Twitter, which has a market share of 6.18% ,
• YouTube, with a market share of 3.18% ,
• Instagram, with a market share of 1.43%, and
• Tumblr, which has market share of 0.57%.

### Financial Growth

• Based on the triangulated financial data of Pinterest in the past five years (years 2014 to 2018), the annual growth rate of the company is estimated to be 99.37%.

### RESEARCH STRATEGY

To provide an overview of the revenue, market share, and financial growth of Pinterest, we searched through the company’s website, company’s financial reports, and market reports. Having leveraged these sources, we were able to provide the requested information. We also used triangulation and calculations to estimate the growth of the company over the past five years.

To calculate the financial growth of the company, we sort to find the revenue generated by the company in the last five years and used data for 2014 and 2018 for calculations. Our calculation was as follows:
The formula for finding growth rate (CAGR) is:

((Ending Value / Beginning Value) ^ 1 / Number of years) -1

Beginning Value: The beginning value is the earliest market size.
Ending Value: The ending value is the latest market size.
Number of Years: The number of years is simply the number of years between the two market sizes.
Beginning Value (revenue generated as at 2014) = \$24,000,000.
Ending Value (Revenue generated as at 2018) = \$755,932,000
Number of Years = 5 Years
(\$755,932,000 / \$24,000,000) ^ 1 / 5) -1
(31.497) ^ 1 / 5) -1
31.497 ^0.2-1
1.9936726-1=0.9936726
0.9936726 x 100=99.37%

Thus, the estimated financial growth for the past five years is 99.37%.

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## Pinterest Branding

In terms of branding, Pinterest seeks to distance itself from the 'social network basket' while ultimately positioning and promoting itself as the ultimate discovery tool in the social commerce industry as the "productivity tool for planning your dreams" and a "media-rich utility that satisfies both emotional and functional needs by solving a widespread consumer problem that is unaddressed by many other platforms." Some of the ways in which the company increases user engagement includes visual search tools, in-app push notifications, personalized email notifications, and search engine dependency (unpaid).

### HOW PINTEREST BRANDS AND PROMOTES ITSELF

• Over the last two years, Pinterest has sought to position itself as the reckoning force and ultimate discovery tool in the social commerce industry.
• Recently, the company has publicized its plan to go public through an IPO.
• In its S-1 filed for purposes of the IPO, Pinterest seeks to brand itself as a media-rich utility rather than a social network.
• In part, Pinterest said: “Pinterest is the productivity tool for planning your dreams. Dreaming and productivity may seem like polar opposites, but on Pinterest, inspiration enables action and dreams become reality.”
• In the same document, Pinterest seeks to position itself as the ultimate and unique platform that helps brands bring their visualized future to life.
• While most internet-based companies are either search or e-commerce tools or completely media-based (video, social network newsfeeds), Pinterest is not a pure media channel, nor is it a pure utility.
• In its functionality, it is a "media-rich utility that satisfies both emotional and functional needs by solving a widespread consumer problem that is unaddressed by many other platforms."
• Pinterest also seeks to differentiate itself from the rest when pitching its value to advertisers. According to the Pinterest S-1 filing, Pinterest says: “in the US, more people use Pinterest to find or shop for products than on social networks.”

### WAYS THROUGH WHICH PINTEREST INCREASES USER ENGAGEMENT

1. IN-APP PUSH NOTIFICATIONS
• Pinterest sends push notifications through the platform's app that is available for mobile users (iPhone, iPad, Mac, and Android). The notifications are tailored to match individual user’s interest areas and recent activity on the app.
• Pinterest makes use of users’ sign-up emails to promote their content. It does so by utilizing users’ configuration details during sign-up and using users' subsequent activity to inform the content of personalized emails sent to users.
• The content depends on users’ preferences or interests, as well as recent searches or pins on the platform to encourage further engagement.
3. VISUAL SEARCH TOOLS
• Since its launch in 2017, Pinterest’s visual search tool, Lens, has been instrumental in gathering data that it, in turn, is used to make better product recommendations to users thereby leading to increased engagement.
• According to Pinterest, the Lens deepens users’ engagement with the platform while fetching additional high-quality commercial content onto the platform.
• Such visual search tools also deepen Pinterest’s "partnerships with brands, retailers, and content creators."
4. SEARCH ENGINE DEPENDENCY (UNPAID)
• According to the company's S-1 filing, Pinterest depends "in part on internet search engines, such as Bing, Google, Yahoo! and Yandex, to direct a significant amount of traffic to our service. For example, when a user types a query into a search engine, we may receive traffic and acquire new users when those search results include Pins, boards, Pinners and other features of our service that cause the user to click on the Pinterest result or create a Pinterest account."
• This avenue produces growth in user sign-ups while increasing "retention and engagement of existing Pinners."

• In the S-1 filing, Pinterest notes that it has "started to test additional marketing efforts including paid marketing campaigns focused on user and advertiser acquisition efforts".
• Through its promotional and branding efforts, Pinterest has managed to reach and pass 250 million monthly active users, the majority of which are outside the United States.

### RESEARCH STRATEGY:

To get the requested information on Pinterest's branding, we utilized the company's website, data from media outlets such as CNBC, the company's S-1 filing (SEC), as well as relevant industry publications by trusted sites such as Digiday and the Drum, among others. As specified, we restricted our search to branding and promotional efforts within the past two years with both aw US and global focus.
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## Pinterest Company History

Pinterest was co-founded by Ben Silbermann, Paul Sciarra, and Evan Sharp in 2010. Within three months of its launching, the company had 3,000 registered users. Since 2009, Ben Silbermann and Evan Sharp have been quietly building Pinterest into a big brand with more than 250 million active users. Although the company is private, its financial information shows that it could be generating up to \$1 billion in ad revenue every year, with a valuation of \$12.3 billion.

### How Pinterest was Invented

• The journey to inventing Pinterest began when Silbermann was working at Google in 2007. He worked as a consultant where he analyzed data and prepared product design recommendations.
• He got frustrated by the company for not letting him build products amidst his creativity. This led to his resignation from Google to raise funds for product development, however, this proved difficult since potential funders were investing in gold at the time
• He eventually teamed up with a college friend, Paul Sciarra (currently a co-founder), who was living in New York. Together, the two came up with a product, Tote, which was a catalog app on the phone.
• They looked for investors to grow Tote, but no one was interested because the app had too many features and was challenging to ship. Furthermore, investors felt that the app could not have attracted much profit since the two were not the technical founders.
• In 2010, Ben and Paul decided to move away from Tote, and when Ben met with Evan Sharp, the three entrepreneurs sat together and came up with Pinterest. Their goal was to create a platform that would be useful in collecting the things that people were passionate about online.
• After its launching in 2010, Ben began to invite all his friends who were living in California to use the website. However, no one got the idea, but it was too late to look back. Ben, therefore, showed his mom the website and its functionality; she would then invite several other users in Des Moines where she was working as a doctor.

### Relevant Events that shaped Pinterest

• Ben and Paul’s idea of Pinterest presentation and features were influenced by Ben’s childhood bug collection — a set of bugs he had pinned on his board. He referred to the collection as Pinterest 1.0.
• After Evan was presented with the idea of Pinterest, he came up with some sketches from his senior thesis and eventually made the grid layout for the Pinterest website in November 2009.
• In January 2010, when Pinterest was launched, Ben sent the website to his friends with the very first “pin” on the site: “I thought this was a perfect idea for a valentine’s gift. Very cool!” Unfortunately, no one got it.
• In May 2010, one of the Pinterest users, Victoria, came up with a program known as “Pin It Forward,” a ‘chain letter’ that would help bloggers exchange pinboards about what they loved about their homes. From this time, more people began signing up for the networking platform. Following Victoria’s pin, several other users began using Pinterest to present catalogs for different collections including maps and guides.
• In July 2010, Pinterest came together in a meeting organized by Victoria, who is the current company’s community manager. Since then, the company has continuously improved the website presentation over the years, which has invited millions of users.
• In the summer of 2011, Pinterest built its first iPhone and iPad apps, which enhanced Pinterest’s ability to change in a manner in which users discovered new things.

### Financing History

• Even though the co-founders did not succeed in selling the website when it started, Pinterest is currently funded by several investors including Bebo’s Michael Birch, Yelp’s Jeremy Stoppelman, FirstMark Capital, and Kevin Hartz.
• Key investments that the company has received include \$10 million by Bessemer Venture Partners and \$27 million by Andreessen Horowitz in 2011.
• In 2013, the company released Promoted Pins which kicked off its major monetization. In 2014, the company was able to solicit up to \$24 million for its development. In the same year, more investors contributed up to \$200 million at a valuation of \$5 billion.
• In 2015, the company witnessed a 479% growth with a revenue of \$139 million. In the same year, the website was valued at over \$10 billion.

### Growth of Pinterest

• Pinterest attracted 3,000 users within three months. Although the number was not impressive in the current social media era, the company focused on the few fanatical users who directed its feature development.
• Launched in a very restricted beta format, the co-founders of Pinterest moved the website towards an open beta format in June 2010 where users were able to access it when they received an invitation from an already signed-up user.
• Ben Silbermann engaged the website users closely and even sent them personal emails including his mobile phone so that they would discuss their experience with the website. Within 9 months, Pinterest reached 10,000 users when it was still operated by a few programmers and the founders.
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## Pinterest Recent News and Growth Plans

The recent news about Pinterest´s growth, expansion and partnerships include important partnerships with some brands like Etsy, Julios and AspirelQ, besides a crescent debut in the stock-market this year 2019. The expansion of Pinterest in Europe is so important, as the future of the app is like an anti-social media platform. The growing of the app is important to mention, as it is expected to reach an ad revenue of \$1 billion in 2020.

### Pinterest´s news about growth from July 2018 to July 2019

• Pinterest is aiming to be public by mid-2019, and on July 23, 2018, published information about the great growth of Pinterest as a private company. The social media company is also finally approaching the \$1 billion mark in ad revenue as it pushes toward an IPO in mid-2019.

### Pinterest´s news about expansion from July 2018 to July 2019

• Pinterest expands Pinterest Ads to Europe: Pinterest Ads was announced as available to all businesses in Germany, Austria, Spain and Italy, and starting today, European businesses can begin to use standard and video ads to help people in Europe find their next great idea.

### Pinterest´s news about partnerships from July 2018 to July 2019

• On July 16, 2019, the influencer marketing platform Julios partnered with Pinterest, with the objective to improve marketing strategies and marketing campaigns results for the marketers subscribed.
• Pinterest became partners with Etsy, Macy´s, Lowe´s and Kohl´s in November 2018, one month before Christmas. Pinterest collaborated with these four brands to provide them with special gift-finding tools to help with their holiday strategies on the platform. All of these tools were designed to give a personalized shopping experience to the customer.
• Pinterest partners up with AspirelQ, “The partnership will enable brands to discover and connect with influencers to produce branded creative, and unlocks the ability to track creative performance on Pinterest — an exclusive feature for Pinterest Marketing Partners.” By partnering up with Pinterest, AspireIQ's customers can collaborate with influencers to create and share visual assets on Pinterest and drive more meaningful consumer engagements.

### Pinterest´s news about growth in its future.

• EMarketer provides stats for the growth of Pinterest going into 2020. The first stat is about the number of users, and the prediction is that U.S. Pinterest user numbers will climb to 84 million by 2020. The current level of U.S. growth has slowed somewhat, despite international growth.
• Predictions of eMarketer going into 2020, is that the Pinterest Ad Revenue for 2020 is predicted to cross the \$1 billion mark, this prediction was made by eMarketer in October 2018. The same set of predictions also anticipates that the average revenue per user will increase to just shy of \$12/user by 2020, from \$5.32 in 2017.
Pinterest´s news about expansion to its future.
• The future expansion of Pinterest like anti-social media platform: In 2019 the Pinterest founder Ben Silbermann wants that Pinterest be an anti-social media platform, the CEO maintained the position with the next phrase: "It's not about following the news. It's not about accruing followers. It's not about following celebrities. It's really about your personal interests." (Source 7)

### Pinterest´s news about partnerships in its future.

• Pinterest and Uber debut in the stock-market, “Altogether, second-quarter offerings brought in \$25 billion, good for a five-year high, according to Renaissance Capital. The 62 deals featured during the period marked the highest count in four years. Pinterest Inc. PINS, -0.19% rounded out the top three with its \$1.4 billion deal.”