The Power of Pinterest

by Aaron Pragnell : why-pinterest-could-be-the-next-social-media-giant

Pinterest is becoming the next big name in the social media space.

For those who do not yet know, Pinterest is an online pinboard that lets you put your favorite images on a single Web page. You can share your “pins” with your friends or browse pinboards created by others.

Pinterest has become a popular tool for users trying to plan weddings, decorate their homes and share recipes, among other activities.

Conceptualized by Ben Silbermann, Evan Sharp and Paul Sciarra, Pinterest was launched in 2009 and since then has experienced rapid growth. According to statistics released by ComScore in February 2012, Pinterest has more than 10 million monthly unique visitors and is now the third most popular social networking site behind Facebook and Twitter.

With these staggering numbers, it looks like Pinterest could be on track to become the next social media giant.

Pinterest originally received a total of $500,000 from about 10 different angel investors in early 2010. In 2011, Pinterest raised $10 million in a series A round of funding and then later in the year, another $27 million in a series B round of funding. The $27 million dollar round of funding valued the startup at roughly $200 million dollars. Funding was led by powerhouse venture capital firm Andreessen Horowitz.

When it comes to successful startups, Andreessen Horowitz has had its hands in nearly every popular one, including Airbnb, Digg, Facebook, Foursquare, Groupon, Instagram, Skype, Twitter and Zynga. Almost all of these companies either were acquired or went public.

Pinterest has grown from roughly 1 million users in July 2011 to more than 20 million today. In May 2012, Pinterest raised $100 million more in funding, which now values the company at $1.5 billion. Not bad for a site in operation since only 2009 and yet to make a dime in revenue.

Pinterest, though, has stated on its site that it has “tested a few different approaches to make money, such as affiliate links” and “might also try adding advertisements, but haven’t done this yet.” The focus currently is on growth and it has definitely excelled in this area.

The Web site industry is all about knowing your user and the more you know the better. This is the key to success in this sector and a big reason behind Facebook’s success. It knows its users and as a result, advertisers have flocked to the site where they can focus their sights on target customers.