Pinterest and its business model
As I was browsing through the news, I came across this piece of latest news regarding Pinterest http://marketingland.com/pinterest-skimlinks-might-try-ads-copyright-issues-not-significant-6213. The news basically said that Pinterest has decided to drop its skimlink, an affiliate link that routes users to external pages which have potential/relevant information for current users. For those who are not familiar with Pinterest, it’s a virtual pinboard where people contribute their favorite pins from every aspect of life online. I was surprised at the news at first because skimlink had been Pinterest’s major revenue-generating source, and no doubt people may wonder what Pinterest’s next step will be in maintaining its growing market size.
I find what we learn on online ads in class somewhat relates to Pinterest’s search for the potential business model. We learn from class that one popular model is to display relevant information while users are browsing the web so as to seduce the users to also view the material. The search engine makes profits by charging the per-click prices from advertisers. However a recent survey done by a data company shows that the traditional per-click charging method may not be as efficient drawing potential customers as expected.
http://www.fastcompany.com/1801084/outbrains-content-recommending-ways-seduce-readers-stick-around The study shows that the key to online business is not only lure potential buys to click the site, but also make them stick around as long as possible. In this article a new start-up Outbrain was introduced. The engine offers a wide range of relevant and authentic information for the users. It charges not at the per-click price, but at the number of successful transactions of a certain buyer. This way the site aims to provide as authentic information as possible, and the buyer will receive the content they want.
Pinterest could consider collaborating with Outbrain on its business. For example, for people looking for wedding service, it can provide additional links on the pinboard that direct viewers to various wedding service providers. Pinterest takes commissions if there’s a successful deal.
–SaharaRose