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Pinterest Focus on Ads Spurs E-Commerce Rivals

An internal company survey last year asked Pinterest employees a simple question: Should the fast-growing social network make money on advertising or e-commerce?

While the results of the survey are not known, the company is now making a big push to generate revenue from advertising. It’s rolling out “promoted pins,” which allow companies to pay to have their products appear more prominently on Pinterest. It’s built partnerships with e-commerce sites like Zappos.com and Walmart.com and begun to pitch high-end brand advertising programs.

Yet Pinterest’s decision not to build a shopping service—long considered an obvious option for a site built around people “pinning” pictures of their favorite things—could leave an opening for more narrowly-focused, commerce-oriented sites that mimic the “pinning” but offer the products for sale too.

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None of these businesses have anything near the scale of Pinterest. Collectively, though, they represent an alternative business model that could make a dent.

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Joe Lonsdale
Joe Lonsdale
Founding Partner, Eight
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In some ways Pinterest’s emerging business model is analogous to that of a lifestyle magazine. Women had traditionally turned to such publications to help them decide what to buy. On Pinterest, people help other people figure out what to buy; one person’s wedding shopping list informs another’s.