Is Pinterest really worth $1.5 billion?
Source: Michelle Maltais
Pinterest just joined the Web's billion-dollar biz club, after pinning $100 million in a recent round of financing, according to recent reports. But is it really worth it?
The Wall Street Journal reports that Pinterest, the latest sweetheart of Silicon Valley, boosted its value to $1.5 billion when it picked up funding from Rakuten Inc., a Japanese e-commerce site, with the online scrapbooking website's existing venture-capital investors including Andreessen Horowitz, FirstMark Capital and Bessemer Venture Partners, people familiar with the matter told WSJ.
Earlier valuations had Pinterest being worth $200 million after a funding round late last year.
With money and users racing to the site, some are left asking what is all the fuss around Pinterest really about? The site went from basically nonexistent to the third most popular social media site behind Facebook and Twitter practically overnight.
The site describes itself as a "virtual pinboard," letting you "organize and share all the beautiful things you find on the Web." And clearly it's connecting with a core of online users.
If you have questions on how to use proper pinning etiquette, Pinterest provides guidelines. They include mutual respect, authenticity and crediting your sources properly.
The social sharing site has demonstrated "tremendous virality," with more than 80% of pins actually being re-pins of other people's stuff, according to findings from RJMetrics. By contrast, a study offering a similar snapshot of time on Twitter showed that only about 1.4% of tweets were retweets.
While RJMetrics figures show the site is clearly drawing people, primarily women in their 20s and 30s, there's a question of whether the site is sticky enough to keep them active. "Users who have joined in recent months are 2-3x less active during their first month than the users that came before them," according to RJMetrics.
"Pinterest demonstrates some of the strongest user engagement, retention and virality metrics I have ever seen in an online business," wrote Robert Moore of RJMetrics. "The company has found tremendous success among its core demographic, and the potential reach of its appeal will be tested in the coming months as attention from broader audiences continues to increase."
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