Pinterest Is A Top IPO Candidate In 2016

In what will undoubtedly shape up as the year of  Financial Unicorns, Pinterest is among the most likely IPO candidates. Investors should keep close watch on the company, which has an $11 billion valuation

Pinterest’s big advantage in the social media space is its potential for monetizing non-intrusive advertising. The company offers great content and allows users to seamlessly discover and explore new products for future purchases. Observers of social media say that companies who do the best job of engaging audiences with quality content and provide the most enjoyable overall user experience will be the most successful. Some other social media organizations have been hotly criticized for interrupting the user experience with poorly placed ads.

Not with Pinterest, which grew revenue over 500% in 2015 year-over-year. Pinterest has more than 100 million active users.

In addition, Pinterest is a female-dominated platform. Women make up 80% of its user base. Nearly 20% of all women on the Internet are registered Pinterest users. This makes Pinterest an important resource for retail companies. They can reach the audience that makes most household buying decisions and also gather ideas for fashion, technology and design. “The jewelry industry is finally catching onto the benefits of using Pinterest for e-commerce,” says Pinterest user and Jeweler Rachel Schlechter.

The company has introduced features to help users more quickly purchase products they want on the platform. For example, a grocery deliver service can integrate Pinterest “action buttons” into recipes so that users can buy ingredients quickly. The ingredients are included in an online shopping cart.

Pinterest has also introduced “buyable pins,” which make it easy to purchase items from companies with whom Pinterest has partnered. Pinterest should have  monetize its vast number of pins.

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Barry Hochhauser 5 years ago Member's comment

I don't understand how Pinterest makes money. I admit I've only been on pinterest a few times but I don't recall ever seeing an ad. Yet you mentioned $500 million in ad revenue. What am I missing?

Brett Hershman 5 years ago Author's comment

Pinterest creates ad revenue through its Promoted Pins among other ways. Much like how I outlined in this article, Pinterest ads are non intrusive and it is what really gives Pinterest a lot of potential. Other Social Media Platform such as Instagram, Facebook, Twitter advertisingments interupt the users experience. Ads seemlessly integrate into the overall feel of pinterest, so much so that you didnt even notice them.

Barry Hochhauser 5 years ago Member's comment

Very interesting, thanks. I had no idea. From a user perspective, that sounds great. But from an advertiser's perspective.... if the ads aren't even noticed, wouldn't they be a waste of money and not very effective?

Brett Hershman 5 years ago Author's comment

Just because users dont know if pins are advertisements does not mean that they go unnoticed. I believe users are more likely to purchase a product if it doesnt appear as advertising. Many pinterest users use the platform to get new ideas for purchases, making this a website that advertisers cant ignore. Especially with 20% of all women on the Internet being registered Pinterest users.