Pinterest Potentially Profitable: Don’t Assume Startups Have No Business Models
Today, Pinterest announced Pinterest Web Analytics, a new tool which will enhance Pinterest’s utility for businesses, as well as other noncommercial websites. Analytics are available for “verified” Pinterest accounts (verification can be done by users themselves demonstrating that they own their domain, so verified status is not exclusive like it is with Twitter’s coveted checkmark). As many have pointed out today, Pinterest is “lay[ing] base” to monetize the enhanced value it is providing businesses, such as through an API.
It is valuable for website operators, from individual bloggers to bigger publications and businesses, to know which of their images are “pinned” frequently. Although some overly cautious copyright attorneys have suggested Pinterest users should delete their accounts due to fear of being sued for infringement, many website owners don’t want to prevent their content from being pinned, and instead encourage it. For them, this new data feature showing how their copyrighted images are being shared will help them know which content is popular. This represents a fundamental split in how rights-holders choose to manage their content: some remain set on trying to retain sole control, even when efforts may seem futile. Others appreciate the value in their content being seen by more people, especially when dissemination can be tracked and potentially monetized directly, or at least serve as marketing for future sales.
Pinterest Web Analytics demonstrates the value that this service can provide businesses. Its new analytics tool will help businesses to recognize and take advantage of the value that Pinterest provides, a value that may eventually translate into something businesses pay Pinterest for. A common occurrence when Internet startups offer new services, for which there may be no obvious business model, is that when they become popular, the press is pessimistic about the likelihood that they will come up with a business model to actually make money:
Google was not immune to this:
- “Google’s Toughest Search Is for a Business Model.” New York Times. 4/8/02
- “The next hot internet stock: How good is Google?” The Economist. 10/30/03.
Facebook still faces skepticism:
- “The 5 Big New Ways Facebook Laid The Groundwork For Making Money During Q3 2012.” TechCrunch. 10/23/12.
- “2012: The Year Facebook Finally Tried to Make Some Money.” The Atlantic Wire. 12/14/12.
And naturally, the subject of this post, Pinterest, has also experienced doubts:
- “Pinterest Has Users, Fancy Has a Business Model.” Adweek. 6/18/12.
- “How Zappos Could Help Pinterest Pin Down a Business Model.” Wired. 8/30/12.
Pinterest may have become popular before it had a revenue stream. But as the above companies and their contemporaries and competitors demonstrate, new and innovative businesses often come up with new and innovative business models.