Pinterest’s initial public offering (IPO) filing reveals just how much influence larger sites like Google and Facebook have over smaller entities.
The Google/Facebook Duopoly Negatively Impacts Pinterest
Pinterest, the creative network that users often turn to for do-it-yourself (DIY) projects and wedding planning inspiration, relies heavily on traffic from Google. The site also allows users to sign in with their Facebook accounts, which means the brand relies on Facebook, too.
The Google/Facebook duopoly has control over many sites, like Pinterest. Therefore, Pinterest’s successes and downfalls are often reactive as Google and Facebook rollout updates and algorithm changes.
Pinterest Lost Traction After Google Algorithm Updates
Pinterest was negatively impacted after Google’s Q1 2018 update, which resulted in removal of Pinterest’s keyword landing pages in Google search results. “Our ability to appeal these actions is limited,” Pinterest said in the IPO filing, “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.”
Pinterest Users Decreased After Facebook Security Updates
In Q2 2018, Facebook changed its login authentication system, and Pinterest noticed the effects, seeing slowed user growth and suffering from a lack of engagement. Pinterest’s current monthly active user (MAU) count stands at 265 million.
Pinterest’s Revival May Be In Ecommerce
According to Pinterest’s IPO filing, the brand may be looking to become an ecommerce platform, competing against shoppable giants Instagram and Amazon.
After acknowledging setbacks and risks related to other digital moguls, like Google and Facebook, Pinterest’s IPO filing noted, “We plan to improve the utility of our service by making it easier for Pinners to go from inspiration to action. In particular, we want to make Pinterest more shoppable.”
Transforming Pinterest into an ecommerce platform will work well alongside their recently introduced shopping features. Because the site’s consumers have more diverse interests than just fashion, which is the primary focus of Instagram’s consumer base, Pinterest may be able to find success as an ecommerce site. But the company cautioned, “We are in the early stages of our monetization efforts, and there is no assurance we will be able to scale our business for future growth.”
While Pinterest has recognized obstacles, the brand has not admitted defeat. Pinterest, which The Motley Fool values at $12 billion, hasn’t announced the initial price of its shares but has introduced the concept of becoming a shoppable, ecommerce platform for consumers interested in food, interior design, fashion and more.
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