The handicraft trading website Etsy.com has 50,600 fans on Pinterest and is currently using its price display function. This means that when Pinterest users "retweet" a chair from Etsy on the information release platform, the picture of the chair will automatically include its name and a banner showing the price.
In recent days, Pinterest has been criticized by some netizens for not disclosing its practices in affiliate marketing. Affiliate marketing is a common form of online advertising that allows merchants to embed links to their online stores on related websites, with the reward being a sales commission given to these websites. Companies like Amazon also adopt this practice.
To date, the company has raised $37.5 million in funding from Silicon Valley angel investors such as Yelp CEO Jeremy Stoppelman and well-known investment firms like Bessemer and Andreessen Horowitz. As it is not a public company, Pinterest does not disclose financial data, but its revenue is not high and it has not yet turned a profit. According to informed sources, Pinterest's current valuation is around $200 million.
However, according to Pinterest and its venture capitalists, affiliate marketing is not currently a significant part of Pinterest's business model. Another concern for some people is that Pinterest's terms of use are worded broadly, giving it the right to "sell" and "modify" member content, which could potentially lead to privacy issues for Pinterest in the future.
For any internet startup, Pinterest's situation is quite normal; some people even say that this has become a rule of thumb. Previously, Facebook and Twitter both achieved rapid growth without an initial business model. Given this, Pinterest co-founder Ben Silbermann said he would follow the same development path.
Creating Value
User Surge
The 29-year-old former Google engineer said: "I think if we build a service that makes it easy for many people to discover things, then this service will be very valuable." Silbermann co-founded Cold Brew Labs Inc in 2008 and launched the company's only product, Pinterest, the following year.
Like other user-generated content websites such as YouTube under Google, Pinterest also has relevant policies for handling copyright images and other content releases. According to these policies, content owners can report copyright infringement to Pinterest, and if true, Pinterest will immediately delete the content. Pinterest says that copyright issues have been "insignificant so far."
Bolotsky said that over the past few weeks, the traffic to the UncommonGoods website from Pinterest began to approach and even exceed that from Facebook. He said, "The overlap between Pinterest users and our users is almost perfect." Near the symbols close to the links of the company's Twitter and Facebook pages, UncommonGoods recently added a new icon that reads: "Please follow me on Pinterest." (Holy Oak)
Social networking sites are typically free for users, and monetization prospects have always been a challenge. So far, the commercialization plans analysts have provided to Pinterest revolve around targeted advertising sales and personal user data, but these plans are not mature and may alienate users - this is actually a problem faced by social networking giants like Facebook.
Nevertheless, this has not stopped New York gift retail website UncommonGoods from using Pinterest's services. According to company founder David Bolotsky, last October, UncommonGoods noticed that its website traffic was coming from Pinterest, so it started using it then.
Criticism Received
Business Model
According to Neil Blumenthal, co-CEO of eyewear retail website Warby Parker, the number of direct visitors to the company's website from Pinterest has quadrupled over the past four months. He said, "Pinterest allows us to promote our products more systematically and reliably."
However, users are flocking to Pinterest. According to the latest data released by market research firm comScore, Pinterest's unique user visits exceeded 11 million in January this year, more than double the 4.9 million in November last year. Meanwhile, visitors spent nearly 100 minutes on Pinterest, compared to just 19 minutes on professional networking site LinkedIn.
comScore analyst Andrew Lipsman said: "Before Pinterest, I've never seen an independent website's user base grow so quickly to exceed 10 million." comScore stated that 68% of Pinterest users are women, many of whom live in the Midwest. Users can only join Pinterest by invitation.
Introduction: Foreign media today wrote an article pointing out that the American image-sharing social website Pinterest broke through the 10 million user mark in January this year, with traffic increasing tenfold in six months. However, this currently hot startup, despite its popularity, cannot convert traffic into income, making this one of the biggest challenges Pinterest faces going forward.
If you've never heard of Pinterest before, you might hear about it soon. In the past six months, Pinterest's traffic has grown tenfold. In January this year, Pinterest's traffic was almost one-third of Twitter's. But this startup also faces a dilemma: it doesn't know how to make money from the traffic.
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In addition, Pinterest's services indeed create value for some small businesses. Co-founder of wedding gift retail website The Wedding Chicks LLC, Amy Squires, said: "Our traffic can be converted into sales." The company's revenue in 2011 was $540,000, much higher than $340,000 in 2010. Squires said that Pinterest contributes twice as much traffic to The Wedding Chicks website each month as Facebook and Twitter do.
Pinterest board member and venture capitalist Jeremy Levine of Bessemer Venture Partners said: "Pinterest's monetization strategy is not yet in the oven, and it is far from the baking counter. We have a hundred ideas, but none of them have been implemented so far."