Here’s Why Pinterest Is Such a Big Deal
Now that we know pictures are worth a billion dollars, can the other visual social hit after Instagram be ripe for a similar valuation? The virtual pinning boards of Pinterest have been crowding up rapidly, increasingly adding value to a company that has already upstaged several established names in the number of users visiting it daily and the amount of time they’re spending on it.
A recent study found Pinterest’s daily average of 1.36 million visitors were originating more referral traffic than LinkedIn (NYSE:LNKD) and two big Google (NASDAQ:GOOG) products combined. Pinterest’s referral traffic of 3.6 percent alone beats Youtube’s 1.05 percent, Google+’s 0.22 percent, and LinkedIn’s 0.2 percent together.
Users were also spending much longer on the website every day at 15.8 minutes — that compares to an average of 12.1 minutes for Facebook, and just 3.3 for Twitter.
Now e-retailers have begun seeing how the site’s exponential growth and crowd power can help them, and have been adding the social network’s shortcut button on their websites alongside those of big boys Facebook and Twitter. Amazon.com (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) have added Pinterest buttons on their product pages, right alongside those for email, Facebook, and Twitter.
The fact that 68 percent of Pinterest users are women also adds to its appeal for retailers. A recent survey of the top 300 online shopping sites found that 28, including Etsy, Hanes (NYSE:HBI), and Aeropostale (NYSE:ARO), have Pinterest pins on product pages. That 9 percent figure for the fairly new network is impressive considering only 20 percent of those 300 have Google’s +1 buttons. A recent report showed Pinterest to be the top referral source for women’s magazines.
Reports also suggest Pinterest may be preparing to raise more capital, so an acquisition is probably not out of the question.
Amazon would do well to buy a network with such referral powers. Surveys have found users have been more inclined to pin products they like on their Pinterest boards than share them on Facebook.
And Pinterest users have some serious buying power. Almost 28 percent of its users have a household income of over $100,000, and nearly half of Pinterest’s users fall in the key 25 to 44 age group. Brands such as Whole Foods (NASDAQ:WFM), West Elm (NYSE:WSM), and ModCloth have a huge audience on Pinterest, clocking over 10,000 followers each.
Combining the visual impact of Facebook’s new Timeline and its already strong and still growing user base, Pinterest could also be the answer to Google’s social woes. Now that Facebook has added to its social might with Instagram, Google, already struggling to catch up, will need to try even harder. Is the answer in a similar acquisition? Unique visitors have grown 2,702 percent since May 2011 for Pinterest, the kind of growth for which Google would, say, sell its right arm. Maybe the answer is in buying instead.