Who Should Buy Pinterest?

 

In order to answer this question, we first need to define what exactly Pinterest is, how it is or could be used, and perhaps a look at demographics. According to Pinterest, Pinterest is a virtual pinboard. It allows users to organize and share things you find on the web. Members can browse boards created by others. People use Pinterest to plan weddings, decorate homes, and share favorites such as recipes. According to this definition of Pinterest, it contains the usage model components of the following: a visual search engine, visual idea source for products, visual “how to guide” relating to hobbies or personal enrichment, and a way to share neat things with others. As far as demographics go, Pinterest is a majority female demographic at this time due to the previously mentioned usage models. Given these characteristics of Pinterest, a potential buyer would need to benefit from: 1) a visual based category, board based ecosystem, 2) a repository of ideas for personal enrichment, decorating, hobbies, etc…, 3) the social connection of sharing cool stuff with friends, and 4) a female demographic or have ideas to expand the usage of the site to males, especially the younger adult male demographic.

I will classify these the following four areas to identify the factors that may be important to a potential buyer of Pinterest: 1) Visual Lists, 2) Ideas, 3) Social, and 4) Demographic. I will attempt to score the importance of each and see how this affects the result for Who Should Buy Pinterest. I will also use a factor (5), DNA to score whether or not the company might actually think of bringing in IP/technology from the outside. It may or may not be in the “DNA” of the company to make such an acquisition.

Also, we have to be realistic with the list of companies that may want  to buy Pinterest but could actually buy Pinterest. I have cut the list down to companies that have the means to pursue such a purchase which would, I think, be in the multi-billions at this point.

Google

1) Visual Lists: Pinterest would offer a different way to view Google’s search by Images. Google already has an image search tools, but it is keyword based and not category or board based. So, this lead to an alternative result for images or supplant the current method with Pinterest’s method. A Pinterest acquisition in this category, removes a competitor and extends current capabilities while also giving more venues for clickthru (Adsense or PPC) revenue. This is valuable from multiple strategic points of view so I score it an 9/10.

2) Ideas: Google is trying to expand more into shopping but this has the effect of competing with your customers. Therefore, I do not see a huge benefit to Google in this specific category; however, if Google uses this characteristic of Pinterest to generate more Adsense revenue, it could be a benefit; however, I have taken this into account in the Visual lists score and will not double count it here; therefore, I score this a 2/10.

3) Social: Google is stumbling with it G+ campaign trying to compete with Facebook Likes and other similar social sharing methods; therefore, an already viral based sharing site like Pinterest may be just what the G+ needs to become relevant. Score: 6/10.

4) Demographic: Google wants to support everyone, everywhere. Pinterest may be too much a US or western culture phenomena at this point and would need to be extended across many demographic areas: cultural, gender, etc… The bad thing about generic search is that it is boring while the good thing is that it does not turn off anyone. While Pinterest may draw in some, it may also drive away others from Google’s main objective which is search. Score 3/10.

5) DNA: Historically, Google is an “invented by Google” company; however, they acquired Youtube showing the ability to absorb potential competitors where the acquisition also expands capabilities. I see Pinterest as a close Youtube comparison; therefore, while Google’s DNA would say “we’ll do it ourselves”, the pragmatic aruguement says “bring them in”. It may be determined by personalities. Score: 6/10.

Total Score for Google: 26/50. Call it 50/50.

Amazon

1) Visual Lists: Oh how Amazon would like to better control how search traffic is directed to Amazon’s site. Would visual categories and boards from Pinterest supplant Google, Bing, or Yahoo from Amazon’s perspective? No. However, if Amazon let’s Pinterest be Pinterest and does not change the formula, Amazon can channel searches from withing Pinterest into traffic from Amazon’s site. A Pinterest acquisition, then, would remove advertisement payments from Pinterest related traffic and may remove any non-Amazon traffic from Pinterest. Score 6/10

2) Ideas: Jeff Bezos would have a wide grin from the sales opportunities from the pins on Pinterest. The difficulty would be to capitalize on the Pins without disrupting the site itself. If appropriate image recognition or keyword software can direct the viewer to relevant products on Amazon, it’s a home-run; otherwise, it could tarnish the usage model Pinterest users would flee the site. It is worth it, in my opinion, due to the organic, viral nature of popular items on Pinterest and the desire for Amazon to participate in the ”I gotta have it” traffic that may be generated. Score 9/10

3) Social: Amazon has become a social traffic destination point due to the value in the comments for items on the site. It has become a replacement, in many ways, for review sites such as Consumer Reports. I’m not sure there would initially be a tight interaction between Amazon’s reviews and Pinterest pages; however, I could see Amazon making the Pinterest usage model better in some way for Amazon Prime customers. Perhaps Amazon Prime members could get easy access to media items for Pinning, for example. I see this as a complementor to Amazon in this area. Score: 6/10

4) Demographic: Given that women make many, if not most, of the purchase decisions in the home, Amazon already understands this and Pinterest would tend to fit into Amazon’s current “voice of the customer” point of view, I think. Score 7/10

5) DNA: Amazon has made many, many acquisitions as they’ve grown. I believe Zappo’s continues to be Amazon’s largest acquisition; so, Pinterest may be a hard chuck to swallow, but I believe it can be done. Score: 7/10.

Total Score for Amazon: 35/50

Yahoo

I’ve included Yahoo here only to say that they may want to take a look at Pinterest, but I don’t see Pinterest responding to any inquiries from Yahoo. Yahoo can’t decide how to get it’s own house in order. Why would Pinterest want to risk being pulled into Yahoo’s issues? The score is irrelevant. No deal here

Microsoft

1) Visual Lists: Bing has to have something to pull some share from Google. With Google’s acquisition of Youtube, the search guru’s at Bing must swallow real hard every time a Youtube site hits the lists on Bing. All of the arguments for Google with respect to image search also apply here; however, Microsoft has more incentive to keep Google from acquiring Pinterest as well. Score: 11/10 due to special circumstances and Microsoft has the money to be stupid if needed.

2) Ideas: Although Microsoft does have a store and products, I don’t see the expanded traffic for dog leashes and the such as being of benefit to Microsoft. As with Google, it may be more of an advertising play. Score: 3/10

3) Social: Could a Pinterest acquisition be a benefit to Microsoft Live or Xbox Live? Maybe. I could see a link from Xbox Live to Pinterest with pinning avatars, scores, etc… Given the installed base of Xbox accounts, wouldn’t hurt. Any upside with Live on the PC platform would be a plus. Also, Microsoft could play this up on Microsoft based tablets and smartphones. Score: 7/10.

4) Demographic: XBox Live is practically all adult males followed by young adult males, followed by boys… notice a trend. Pinterest is predominately adult female. As long as Microsoft doesn’t mess with the formula of either, but looks for synergistic areas of sharing like avatars as already mentioned, this could be a win for Microsoft. Score: 7/10

5) DNA: Microsoft has the money and has made big time purchases in the past. However, they have also shown a core competency of not gaining huge benefit from these acquisitions. The question is not does Microsoft have the DNA to purchase Pinterest but does Pinterest have the DNA to be acquired by Microsoft. This would come down to autonomy after acquisition, I think. Score 5/10.

Total Score for Microsoft: 33/50. However the wild card would be if Google were in the mix for bidding. The score could go to 50/50 if emotions (insanity) come into play.

Facebook

I’m going on a limb here and stating that this does not need analysis. I thinking that the intersection of Silbermann and Zuckerberg is the null set

Sony

This is my surprise suitor on the list

1) Visual Lists: Sony is not in search and I do not see the Visual lists as a driver for Sony for purchase: Score 0/10.

2) Ideas: Sony does have products; however, unless there are Pins related to technology, it may not be of benefit to Sony. Score 2/10

3 and 4 ) Social and Demographic: Sony is similar to Microsoft with respect to potential collaboration of the game platform with Pinterest. The Playstation has a large installed base and there could be cross support. Score: 6/20

5) DNA: Sony is almost in a death spiral on electronics. They just reported horrible results for year to date 2012. They must make a hail-mary to become relevant somewhere in the Internet economy. They could just buy Pinterest and let it run as is. Score: 10/10

Total Sony Score: I believe the real score 18/50 to be irrelevant. If Sony is looking for a high quality Internet 2.0 site, Pinterest may be it. Can Sony move fast enough, corporately, to make it happen? Probably not.

Results: Amazon probably has the best, defensible business reason to buy Pinterest. However, Google and Microsoft also have strong arguments to be made. If Google gets in the fray, I believe Microsoft would be compelled to jump in both feet. Which brings a final conclusion to be either; therefore, Amazon or Microsoft to be the two best candidates for who should buy Pinterest.

 

 

 

 

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Who Should Buy Pinterest? — 2 Comments

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