Will Pinterest Go Public?

This is a guest post by Megan Totka, Chief Editor for ChamberofCommerce.com.

Is there a Pinterest IPO in the cards?It’s no secret that Pinterest has been steadily gaining steam in the social sphere for the past year or so. Now the once-budding social “scrapbooking” site looks to be taking the next major step toward Internet superstardom.

That’s right; a hotly-anticipated IPO seems to be just around the corner. Pinterest appears to be following in the footsteps of giants such as Facebook and Twitter, rapidly raising cash in the process (and a $200 million raising round with a $5 billion valuation is nothing to scoff at).

Yet is such a valuation a fair one? Are we putting too much pressure on Pinterest? As we know with Facebook and Twitter, big IPOs come with big expectations. Those expectations don’t always pan out, now do they?

Although we’re naturally inclined to judge as spectators to this vast, social landscape, it may not be fair to compare Pinterest’s IPO to that of Facebook or Twitter quite yet. Yes, Pinterest’s recent success signals a new social giant throwing their hat into the ring when it comes to competing with the “big guns;” however, their IPO and its potential success should not be taken lightly.

Consider Pinterest’s truly unique audience and scope that truly sets it apart from its newfound competitors:

  • Pinterest itself is a social network based around the concept of “product” (albeit perhaps not intentionally)
  • Pinterest’s predominately female user-base opens up new possibilities in terms of marketability and loyalty
  • Pinterest’s potential for ads and revenue is less intrusive and more inviting due to the scope of the site itself

It’s hard to deny Pinterest’s potential in terms of the site’s audience and scope. The fact that Pinterest has worked so hard to find its own identity within the social network may be what sets the site itself and its IPO apart from the crowd.

No Interruptions

While ads are constantly seen as interruptions in the social sphere, Pinterest itself is based around the concept of products and inspirations. Often referred to as a “scrapbooking site,” Pinterest users are constantly looking for new ideas and products to support those ideas. Home décor, recipes, fashion, you name it. These ideas may not always look like dollars and cents to advertisers; however, the concept of being able to instantaneously purchase on the page is most certainly alluring.

What’s really important, though, is that ads (if done correctly) are not disruptive to Pinterest’s user experience. While Mark Zuckerberg was hesitant to ever put ads on Facebook, Pinterest lends itself to seemingly endless ad possibilities. Combined with its pristine search functionality, the site is definitely going in the right direction when it comes to knowing and targeting their users. However, Pinterest must be mindful of how ad-heavy they go as they risk losing the “social” aspect of the web, ultimately becoming a straight-up commerce site.

The Power of the Female Buyer

Pinterest has often been singled out for its female-dominated user base. Consider the buying patterns female shoppers and the fact that, when compared to men, women are

  • more likely to buy products online,
  • more likely to shop and search for deals online,
  • and more likely to share their shopping experience via the social network.

Not only has Pinterest locked onto an active, buying user base; they’ve also built a network of evangelists to continue to advertise the site and its products. It’s a win-win situation for the site as it looks to grow in the wake of its possible IPO.

Apples and Oranges

Comparing social networks (Facebook, Twitter, Pinterest, Tumblr, etc.) is often like comparing apples and oranges. For example, Facebook’s size and scope is completely different than that of Twitter. They both target a similar broad base of users, but they expect completely different behaviors and patterns from such users in terms of marketing.

Pinterest takes a completely different approach. Whereas Facebook and Twitter are about the “what’s happening,” Pinterest is about ideas and products. Pinterest is a hotbed for commerce and sits somewhere closer to Tumblr on the social spectrum due to its image-heavy sharing nature.

In short, naysayers are ready to judge Pinterest’s IPO based on the shortcomings of Facebook and Twitter; but is that really a fair comparison?

The Bottom Line

As Pinterest appears to be on the verge of going public, it’s easy to make predictions one way or the other. It’s no doubt that future is bright for Pinterest, regardless of how the IPO goes. It’s a rare thing to find such a massive, accessible site that’s carved out such a specific, marketable niche. Time will tell how much this social gem manages to shine.

About the Author

Megan TotkaMegan Totka is the Chief Editor for ChamberofCommerce.com. She specializes on the topic of small business tips and resources. ChamberofCommerce.com helps small businesses grow their business on the web and facilitates connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide.