Pinterest, the site for people who want to categorize and collect photos and links from across the Internet, is worth $500 million right now, says Capstone Investments analyst Rory Maher.We found five compelling arguments in Maher’s report:
- If Pinterest took simple monetization steps right now its annual revenues would be about $150 million. “We believe Pinterest can monetise at a rate higher than online display ad companies, but lower than search.”
- Pinterest already drives more referral traffic on the Web than Twitter.
- Pinterest is a threat to Facebook, which tends to acquire threats.
- Pinterest would be a great fit for Google: “the top brands on Pinterest are mostly in the Retail, Travel/Leisure, Home/Garden, and Gifts categories – 4 of Google’s top 10 ad categories.”
- Pinterest users spend 80 minutes per month on the site, “4X as much as Linkedin and Twitter.”
Maher does think there is a ceiling on Pinterest’s mainstream appeal:
“We estimate 80%-plus of Pinterest’s audience is female, representing a fairly narrow demographic. We believe it is going to be difficult to get men enthusiastic about the platform since men just don’t seem to pin things (which is probably why there are only 8 sports team pages on Pinterest vs. 50 women’s health brands and over 40 retail brands). We don’t think a narrow demographic will hurt Pinterest near-term growth, but it likely will prevent it from being a large mass-market social network.”
Having spoken to sources close to the company, we think it would actually cost Google or Facebook much more than $500 million to buy Pinterest at the moment. Cofounder and CEO Ben Silbermann gives off a strong Zuckerberg-like I’m-never-selling vibe, and those can be very expensive to overcome. It’d take at least a couple billion to get the deal done.
Pinterest may seem like an overnight success, but it’s actually been four years in the making. You can read the dramatic story here.
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