Comments on: How much does Pinterest actually make? http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/ Sun, 19 May 2013 08:29:32 +0000 hourly 1 http://wordpress.com/ By: Cliff http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-838028 Wed, 02 May 2012 15:17:31 +0000 http://gigaom.com/?p=505752#comment-838028 Maybe I’m wrong but that conversion seems way too high. Each user buys one product? I would say more like 1% of users buy an average of two products. Here is a short write up of a more conservative example guessing that they would be making more like $240,000 per month: http://www.howitmakesmoney.com/how-pinterest-did-does-or-will-make-money/

Just seems a bit aggressive to conservatively assume everyone buys something.

]]> By: alshalabi http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-833171 Sun, 22 Apr 2012 01:54:21 +0000 http://gigaom.com/?p=505752#comment-833171 OK, but all of you guys are valuing the company like a 409A valuations!!! While that work for established companies, it doesn’t really apply for Startups. You guys are saying we are using the data we have to remove all of the uncertainties!! I’ll say you built the whole model on uncertainties, you can’t value the Pinterest in it’s affiliate revenue model. That’s clearly not how the company will make money in the future.

There are many other things that you ignored in your valuation:
1- Users in Pinterest spend 89 min. each month. That’s 68min more than Twitter and just behind Facebook with 409min (data from Comscore).
2- The website is on an invite only mode. Which means that it’s growing solely in WOM. Every invite have been sent is a sign of a customer satisfaction (except for the techy guys that wants to know what the whole buzz is about). Some websites can’t be used unless you have your friends in, and that’s the only reason why you invite your friends. That’s not the case in Pinterest, users only invite their friends after they are totally satisfied with their personal experience. That’s a strong sign of user satisfaction.
3- While facebook and twitter is about people and news, Pinterest is about products and things. If they succeeded to have people to spend that much time looking into products, then they totally nailed it.
4- Are you really worried about competition!! Google suck in social networks, and I think they are smart enough to admit it. And Facebook is about people, try adding products and you’ll have all of the male hanging on WhatsApp instead.

At the end, I know that we all hate Pinterest because everyone is to talk about it right now. But, let’s be honest with our-selves, Pinterest created something here. Pinterest is our personalized catalog that updates it-self every second. Yes, catalogs exist for females and Pinterest as well.

Abdullah Alshalabi,

]]> By: alshalabi http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-833169 Sun, 22 Apr 2012 01:50:43 +0000 http://gigaom.com/?p=505752#comment-833169 OK, but all of you guys are valuing the company like a 409A valuations!!! While that work for established companies, it doesn’t really apply for Startups. You guys are saying we are using the data we have to remove all of the uncertainties!! I’ll say you built the whole model on uncertainties, you can’t value the Pinterest in it’s affiliate revenue model. That’s clearly not how the company will make money in the future.

Abdullah Alshalabi,

]]> By: __francesc__ http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-833010 Sat, 21 Apr 2012 16:17:57 +0000 http://gigaom.com/?p=505752#comment-833010 Actually, I think there are a couple of hypothesis on the distributions that need some fixing. In particular some distributions can come out negative. Please see http://bit.ly/HLvulG for an analysis of the Monte Carlo method in the Pinterest case.

]]> By: Chris http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-826787 Fri, 06 Apr 2012 00:55:50 +0000 http://gigaom.com/?p=505752#comment-826787 Nicely done on the analysis Rags. Puts some actual perspective on the subject.

]]> By: Karen Templer http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-825994 Tue, 03 Apr 2012 21:58:09 +0000 http://gigaom.com/?p=505752#comment-825994 Rags, I’d love to hear more about how you came up with your numbers  especially the $2 and $18 figures. I don’t even know what one can buy for $2 (that would be bought online), but $18 seems like a very low “high.”

(Pinterest claims to have stopped using Skimlinks last month, but this is still an interesting academic exercise.)

]]> By: Andrew Chen http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-825616 Mon, 02 Apr 2012 22:19:11 +0000 http://gigaom.com/?p=505752#comment-825616 Have you considered a model where Pinterest has a lot more users? Google AdPlanner pegs them at 100M uniques worldwide:
http://cl.ly/1F1F2r1r2E121P1L3Y2f

What do you think?

]]> By: Josh Blanthorn http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-825451 Mon, 02 Apr 2012 13:57:55 +0000 http://gigaom.com/?p=505752#comment-825451 At the end of the day value is more than affiliate. There is an inherent value to the user that they are attracting. There is an advertising value that far exceeds any affiliate links which often will never monetize a site to any value past the cost of development and maintenance.

]]> By: Michael Murdoch http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-825368 Mon, 02 Apr 2012 05:57:21 +0000 http://gigaom.com/?p=505752#comment-825368 It’s backed by Andreesen Horowitz. Need I say more….

]]> By: Rags Srinivasan http://gigaom.com/2012/03/30/how-much-does-pinterest-actually-make/#comment-825292 Sun, 01 Apr 2012 23:06:25 +0000 http://gigaom.com/?p=505752#comment-825292 On the point of “original figure doesn’t seem far-fetched”, that is why I built the model to see how likely is such a scenario. Instead of 10 million users transacting $10 every month (for a total of $1.2 Billion sales) the model calculates outcomes of different scenarios based on the 90% estimates. This way we know the uncertainty and can quantify it.
The final result is stated only in terms of probabilities and not as absolutes.
Hope this clarifies.
-Rags

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