(Bloomberg) — The power of Google’s search engine looms large over Pinterest Inc., the image search site that filed for an initial public offering on Friday.
The IPO filing said that Alphabet Inc.’s Google “de-indexed” Pinterest’s keyword landing pages in the first quarter of 2018. That hurt online traffic and user growth in the following quarters, Pinterest said in the filing.
Pinterest did not say why Google did this, and a Google spokeswoman didn’t immediately respond to a request for comment. De-indexing happens when Google removes web pages from its gigantic network of online information. The move typically means those pages no longer show up in Google search results.
Pinterest serves as a repository for user images or “pins” on various topics, like gardening, fashion or art. De-indexing this content would have resulted in the company’s web pages not appearing in the free results when people use Google to look up certain keywords. This can be disastrous for businesses in an increasingly online world. Pinterest did not say in the filing whether its issues had been resolved.
The company’s warning shows how much smaller internet companies rely on Google — and how they can be whipsawed when the search engine changes its algorithm or makes other tweaks. This may be a more of a concern for Pinterest because it competes directly with Google. Both companies provide online image search results, and in 2015 Google launched Collections, mimicking Pinterest features like image boards and shoppable ads.
“Some of these search engines are owned by companies that compete with various aspects of our business,” Pinterest said in its filing Friday. “To offset the impact on our user growth, we would need to increase our investment in other growth strategies, such as paid marketing or other initiatives that drive user acquisition, which may cost more and be less effective.”
Here’s the warning from Pinterest’s IPO filing:
“When a user types a query into a search engine, we may receive traffic and acquire new users when those search results include Pins, boards, Pinners and other features of our service that cause the user to click on the Pinterest result or create a Pinterest account. These actions increase Pinner growth due to signups of new users and increase retention and engagement of existing Pinners.
“Our ability to maintain and increase the number of visitors directed to our service from search engines is not within our control. Search engines, such as Google, may modify their search algorithms and policies or enforce those policies in ways that are detrimental to us, that we are not able to predict or without prior notice. When that occurs, we expect to experience declines or de-indexing in the organic search ranking of certain Pinterest search results, leading to a decrease in traffic to our service, new user signups and existing user retention and engagement. We have experienced declines in traffic and user growth as a result of these changes in the past, and anticipate fluctuations as a result of such actions in the future. For example, in the first quarter of 2018, Google de-indexed our keyword landing pages, which negatively impacted traffic and user growth in the quarters that followed. Our ability to appeal these actions is limited, and we may not be able to revise our search engine optimization (“SEO”) strategies to recover the loss in traffic or user growth resulting from such actions. Changes in policies or their enforcement may not apply in the same manner to our competitors, or our competitors’ SEO strategies may be more successful than ours.”
To contact the reporter on this story: Alistair Barr in San Francisco at [email protected]
To contact the editors responsible for this story: Jillian Ward at [email protected], Anne VanderMey
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.