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Comment by adventured | Hacker News Reader

Twitter is currently trading for $12.7 billion. They did $2.5 billion in sales last year.

Pinterest has a: show me the sales, problem, I suspect. Public comparables in social like Twitter & Snapchat are going to cap their upside until or unless Pinterest can somehow demonstrate a very profitable business model. If those margins never arrive, Pinterest is going to be worth something a lot closer to Yelp than Twitter. From $12 billion, there's a massive downside risk in the last few rounds for Pinterest investors if this gets a similar reality chopping to what Twitter & Snap have.

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Wait, so Pinterest is about as valuable as Twitter? That makes no sense. Twitter is everywhere - it's how people communicate with the damn President of the United States of America for crying out loud. Twitter and Facebook are really the only big worldwide social networks: everything else is localized, or too small. There's massive value from that alone.

Meanwhile Pinterest... well, maybe they have a lot of interior decorating collections and cupcake ideas, but there's also a ton of spam and most people I know that used it years ago don't use it now.

How are the two even close?

Twitter is 11 years old and has never made a profit even though it's been publicly traded for 4 years. It has 330M MAUs but its growth has stalled.

Pinterest is 7 years old, has close to 200M MAUs, and is still growing at a good enough pace for investors to justify this kind of valuation. Pinterest also excels in huge markets which you are probably not familiar with: recipes, weddings, fashion, and interior design.

Even though most people you know don't use it, there are still 200+ million people out there in other demographics that do use it. Probably a lot of them have never heard of Twitter :-D.

FWIW I think Twitter is undervalued as well.

I'm actually one of the few percent of Pinterest users that are men, and I have used it for years for exactly those kinds of things: recipes, fashion (to some extent) and interior design. But these days I'm finding that it's much easier to just use the rest of the web. There's so much spam, and noise, repeated crap, and things which make nice pictures that would never work in real life.

What I have no idea about is how Pinterest will make money. Ultimately, Twitter could continue for years without making money, and there are a number of things they can charge for (larger tweets, a Pro service, tweet pipeline, user data, faster access to Tweets) (perhaps sell Trump's tweets to HFT firms, 500ms before the rest of the world sees them?) Meanwhile, Pinterest is full of shitty ads if you turn off your uBlock, and the only other revenue stream I can think of is Amazon affiliate stuff, which has probably dried up now that Amazon turned off that pipe.

500ms is nowhere near enough to discern the necessary qualitative insight (or lack thereof) from Trump tweets and translate it to quantitative arbitrage.

I have the exact opposite view. Fundamentally, many people look at Pinterest for ideas about stuff they want to buy - that's usually the perfect spot to be if you want to make money on advertising.

If anything, just seems like Pinterest has big execution problems more than business-model problems.

It seems that Pinterest has had at at least three distinct revenue sources to date.

1. Commission earnings from inserting their own affiliate identifier into pins to things on Amazon. I'm not aware of what other sites they earn commission from, but that has probably dried up some as Amazon's commission structure changed. Notably they now allow users to post/pin things with links containing user's affiliate code.

2. Paid promotion for user pins, something in between "native ads" and "search ads". Pretty common for anything that might be considered a marketplace, but it works on Pinterest I guess.

3. Sponsored video content to play along paid promoted pins, not unlike Snapchat's corp paid video content.

4. ???

They do, and they also have something Twitter typically does not, which is purchase intent. Lots of people go go Pinterest because they are looking for ideas on something to buy. If they can find it and purchase it all in one place, that makes Pinterest valuable from a direct response marketing standpoint.

Also, Pinterest's demographics are VERY desirable to marketers.

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