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Silicon Valley's latest company to introduce an initial public offering is Pinterest, the image and image network based in San Francisco, which in recent years has created an important advertising and commercial activity. from its growing number of users. The company, although still unprofitable, claims to have generated more than $ 750 million in sales last year and reduced its losses by nearly $ 200 million in 2016 to just under $ 75 million a year. Pinterest says the fourth quarter of 2018 has been profitable, but not enough to come out of the red throughout the calendar year.
The company plans to be open to the public on the New York Stock Exchange. He joins the giants Uber and Lyft, the on-demand distribution company Postmates, the Slack business communication platform and the Airbnb short-hotels and short-stay rental service. one of the many Silicon Valley companies expected to launch this year (or next) that could dramatically change the landscape of the Bay Area.
Pinterest, which was launched in 2010, earns mostly money by attracting advertisers to its platform, where users create tables in which they identify themselves and through which advertisers can try to sell them products. Pinterest claims that its more than 250 million monthly active users have created more than 4 billion cards with a combined total of 175 billion pins saved. The platform itself has processed more than 2 billion searches, many of which attempt to process visually using methods based on machine learning, such as object recognition and discovery. ; images.
Indeed, Pinterest does not compete so much with Facebook or traditional e-commerce sites like Amazon, but with search engines and search-based advertising tools, as well as with sites that organize manually or by algorithm products that advertisers can serve ads to. "We mainly compete with Internet consumer businesses that are tools (research, e-commerce) or media (news, video, social media)," Pinterest wrote in its S-1 document.
"This way, Pinterest is unique. Most consumer Internet businesses are either tools (research, e-commerce) or media (news feeds, video, social networks), "says the company. "Pinterest is not a pure multimedia channel, nor a pure utility. It is a rich media utility that addresses both emotional and functional needs by solving a widespread consumer problem that is not addressed by many other platforms. We call it discovery.
This makes Google one of its main competitors, but also more and more Instagram as Facebook decides to monetize its image sharing network as a visual search engine allowing users to find and buy products based on their interests and the interests of the influencers and celebrities they follow. .
Pinterest describes a number of other obstacles she faces in the risk factor section of her S-1:
We are at the beginning of our monetization efforts and we continue to develop and adapt our revenue model. Our growth strategy is driven by, among other things, our ability to attract more advertisers (including serving more mid-market and unmanaged marketers and strengthening our sales efforts to reach advertisers in other international markets), by developing our business with existing advertisers and expanding our advertising product offering, such as self-service tools. There is no guarantee that this revenue model will continue to be successful or that we will generate increasing revenues.
Pinterest also said that ad blocking tools could hurt its profitability in the future. "Existing ad-blocking technologies that have not been effective on our service can become so if we make some product changes and new ad-blocking technologies can be developed," says the company.
Pinterest's reliance on key players in technology is another problem. "Developers of web and mobile browsers, such as Apple, Microsoft, or Google, may implement changes to their browser or device features that prevent our ability to measure the effectiveness of advertising on our platform, including limiting the use of third-party cookies or other cookies. tracking technology. "Two years ago, Pinterest announced the changes Apple made to its Safari browser to reduce ad tracking.
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