- "Advertisers Face Hurdles on Social Networking Sites"
- "The Connection of Online Search and Advertising"
8 July
Executive
Summary
Pinterest is an online start-up that has experienced a
meteoric rise with a very unique business canvas. Due to operating as a social media and
networking platform, Pinterest’s key resources, like most other internet
companies, are creative human resources, knowledge-intensive human resources,
and network platform functionality. Currently, they serve a very distinct yet
broad customer segment. The term “internet
savvy individuals” describes this elusive segment because it is a mixture of
both women and men, women being the majority of users, young and old, and
differing sociological backgrounds.
However, the common thread is being internet savvy. The near future holds a new customer segment
that is purely business entities. Using
both direct and indirect channels, Pinterest provides a vast array of value propositions
to these segments with the most important being the convenience and ease of use
and then the individualistic customization and consolidation of information. Unlike Facebook and other social media
platforms, Pinterest offers a very distinct and highly coveted value not only
to the individual segment but to the up and coming business entity segment. As it stands, Pinterest has no confirmed revenue
streams, depending entirely on multiple rounds of independent funding. However, the potential revenue streams stem
from its unique value proposition. Again,
unlike Facebook, Pinterest is a collaboration of individuals wants and desires,
not just an innate status. When people
utilize Pinterest, they are in the “buying mode” whereas on Facebook, people
are there to socialize and not fully engaged with the buyer’s mentality. Thus, “Pinterest
is sending a signal to the multitude of brands and retailers that it's getting
ready to open for business itself by unveiling accounts designated for
marketers today” (adage.com).
Pinterest’s value proposition is a treasure trove for businesses and a
potential lucrative revenue stream through transactions fees tagged to final
purchases Pinterest facilitates, Pay-Per-Click fees from click through ads on
Pinterest, and licensing fees that Pinterest charges companies to utilize their
services. As with revenues, there are
no documented expenses associated with Pinterest. But, simple extrapolation can be used to make
predictions. The two biggest
expenditures with Pinterest are assumed to be R&D ($20,000,000) and the
Amazon Web Service ($10,000,000). Then,
with 80+ employees with an assumed $100,000 salary, staff/administration costs
are valued at $8,500,000. Next are
network maintenance costs of $5,640,000 ($470,000/month) and finally, property
costs of $5,000,000. This brings total
yearly expenses for Pinterest to $49,140,000.
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