Pinterest is one of the worst things to happen to my search experience in the last decade.
I've started wondering if they're using something like StyleGAN to general endless image variations that exist nowhere else (and have no source or context on pintrest) in order to pollute google image results.
I am genuinely curious, how does the year-over-year growth of 60% come together with the pretty consistent "death curve" according to Google Trends [0]. Could they have deliberately lowered the revenue in 2017 through some clever accounting in order to come up with this number? As they have been around since ~2012, are there any prior financial metrics publicly available?
Forgive me for being blunt, I just think it’s a bit obvious: they have grown through means other than someone going to google.com and typing “Pinterest.”
I can think of a dozen reasons why that would be the case. Google Trends does not match 1:1 popularity, usage, or growth of all products.
Personally, I’m only a casual Pinterest user and have no stake in this, but the service has gotten a lot better over the last couple years.
Fun fact: It's a great place for black people when it comes to hair styles and hair care, surprisingly one of the best places. Google search can't even compare.
Google is doing a reasonably good job of making their search useless on their own. I rarely have to switch from DDG to find anything anymore, and when I do I'm frequently disappointed.
...but you have found the more accurate guess-data.
Pinterest have presumably done well with Google's carousel that shows image search results at the top of the list.
I am not sure the HN crowd is target demographic. Who here is looking for a new outfit to buy and wear? Who is wanting inspiration for some 'infinity band' tattoo?
People here just end up on Pinterest wanting images for projects, no intention of pinning boards together.
Why does this happen?
Pinterest have built a body of content that is essentially evergreen and well documented as far as images go. Nobody is interested in last week's news but images don't have this problem. Hence they get the image search results traffic.
Beyond that they do have their regular crowd looking for inspiration on clothes, home trinkets and what not. The search result blessings keep them relevant even if nobody outside the target demographic is actively using it.
Thanks for linking the Trend data. I was trying to figure out a way to express this myself. Colloquially, I feel like Pinterest used to be mentioned in conversations 5+ years ago with some frequency. For example, I would have someone mention some recipe they saw there or see links to Pinterest shared on other social networks. But in the past few years, I don't know if anyone in my circles has actually mentioned it at all. This Trend data seems to reflect what I felt through my anecdotal experience.
That said, this is US data if I am not mistaken, and Pinterest seems to have a lot of activity happening internationally. Other comments state they have more MAU outside the US than within.
If it’s US data, then your experience is my experience and it makes total sense. The trends represents search of “Pinterest” which was word of mouth driven. This was a very word of mouth driven app. Ladies in my life educated their friends, then their mothers, then their aunts, etc. They explained what it was and what “boards” are. But, it’s reached a saturation point now where everyone knows what it is.
The conversation turned to wife-> her mom “did you see my nursery board? I pinned some inspo” and no explanation is needed she already had the app installed and didn’t need to go google “Pinterest”.
Also, the women in my life love it for inspiration that definitely drives purchasing behavior. I can’t speak to whether Pinterest is monetizing that opportunity to its fullest but I certainly feel like it’s established itself as a place to research a future purchase which we all know is a valuable position to be in. I use my wife’s account occasionally to look up ideas for a home renovation or landscaping ideas. It helps. But I feel they’ve made some poor UX choices bordering on dark patterns. And with that, they are probably their own biggest risk. Eventually they will do something to totally alienate and piss off their user base.
People search for Instagram profiles and content that get's reported as news i.e. "did you see X on Y's Instagram". Same for Snapchat, which requires searching for username discovery. Pinterest doesn't have either of those traffic catalysts.
If I'm reading their MAU charts correctly, they have way more MAU outside of the US than inside (82m vs 184m last quarter), not only that but international user growth is relatively strong compared to the US. That said, 94% of revenue last quarter was from the US, so they are not monetizing internationally really at all. If they can improve international monetization then there is a lot of room for revenue growth it would seem.
From my Latin American perspective, I'd say it's due to way less disposable income in emerging markets and less of a consumerism mindset.
America has the benefit of decades of intense consumerist propaganda to fend off the evil reds, while the biggest emerging markets are often very vocally against "Capitalism" (even if they would all love to own iPhones)
Maybe, but America has relatively low taxes and high income.
This is an anecdote, but I was looking at developer jobs in Europe and the salaries are pathetic. 65k Euros for a senior engineer with a 50% tax rate? Are you fucking kidding me? I can make 250k in the US at a 35% rate. It’s absurd.
Do keep in mind that Europe is not a single country. Within the European Union, salaries and tax rates vary greatly. For western Europe, that seems a bit low.
Besides the northern countries, the tax rate is not 50%. Most countries either have a flat rate that is well below that or have a system where you pay in boxes. Like %30 over the first 20k, then %47 over the remainder etc. On top of that, many countries have countless schemes that result in tax deductions. Like owning a house gets you a discount.
In almost all cases, the effective tax rate falls well below 50%.
This is an 11-year old article and honestly total bullshit. European developers and professionals in general are quite happy with the welfare in Europe. It's a completely different mindset. Yes we earn much less, but at least if we can sick or fired we know we can get some decent support from the state.
a) Money. Most places do not have a lot of surplus wealth, and only a few places in Europe do. Consumers need to have extra money to spend on 'stuff' beyond the very basics, i.e. a consumer oriented economy for a lot of ads to work.
b) Fragmentation. This is a two-sided problem. Most countries are very small, have their own laws, regs, and networks for everything that are very established. So the unit cost of marketing to advertisers etc. is going to be higher. And things move slower in most places.
c) Behaviour. American culture is pop culture. Sometimes it's hard to explain that one. Americans move according to trends. Social mores change quickly depending on whoever has the biggest megaphone: news, broadcasters, even advertisers. It's a place where commercial interests drive aspiration, even morality - witness the amount of virtue signalling in ads, i.e. Nike's recent campaign etc.
W. Europe, the other lucrative market - they are really traditional in their ways. They already have their day full of things to do. Germans leave work at 5 and go and drink a specific kind of beer at the local pub. They play certain kinds of sports. They buy certain things. In the UK, I've been to 'rich people's' homes and they have these ancient toasters. But they work! They don't just 'buy new stuff' it's not part of their culture. It's the same in most of the rest of the world.
The rest of the world is really just not designed as a big commercial vehicle.
The EU advertising industry is only slightly smaller than in the US on a per-capita basis. So obviously those consumers are being monetized, otherwise businesses wouldn't be spending so much on advertising.
US vs. EU advertising spend is about $200bn vs. 100bn euros. On a per capita basis, that is $611/pp vs. 200 euros/pp. I wouldn't call that "only slightly smaller".
I pointed out the obvious failing in every major social media company to generate revenue outside the USA. How is that me failing to recognize? I am quite explicitly recognizing just that.
If that was the case, then China would be the top market. This has more to do with the fact that Americans are used to pay for software at a personal level, something that not even Europe is fully used to.
Their economy is larger, and yes, bigger GDP than America. Per capita, US still leads, but since I'm not interested in a piss competition here, let me clarify.
The point of my reply was that saying that the US has more money does not explain the fact on why people in the US pays more for software than in the rest of the world, which I believe is the key issue when it comes to a social network ability to monetize international markets. You have rampant software piracy in Latin America, Asia and Europe. At least in the EU, things are better for business software. China is so notorious for piracy that a former head of Microsoft R&D for China said: "In China we [don't] have problems with market share. The issue is how do we translate that into revenue.".
Nowadays software companies in China have found success by giving away free games and selling coins and whatnot. So my whole comparison was that if China has a bigger economy (or smaller/similar if you feel offended by that fact), then how do you explain that even large companies like Microsoft are struggling in that market.
Please check https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) where the World Bank, IMF and the CIA, they all agree China is on top now. But I'm truly impressed how that fact seems to offend people here based on the downvotes these replies get.
PPP isn’t the actual amount. That’s why people are talking rightfully about nominal. Facebook makes money based off your nominal money, not an algo based PPP since it’s not a real number.
All those organizations you mention all agree USA is still on top for nominal GDP.
I unfortunately think you’re projecting with the people getting offended bit.
So you are right with the nominal distinction, and if I was wrong about that, then the downvotes probably reflected that more than any opinion of mine.
Even then, when India or China overtake, they’ll still be poor countries in many ways. Only a fraction of their populations will have disposable income at a level that companies can expect to get.
Of course you don’t need all the people in the country to have (disposable) money since their populations are so big.
And companies like PinDuoDuo in China have shown they can become $30B public companies with a profit in 2 years by mainly targeting poorer or more rural Chinese.
"America has a far bigger GDP"
It depends on how you calculate it. According to PPP, China has a GDP of 25 trillion vs the US of 20 trillion[1]. Yes, China has a bigger market and bigger GDP. If you calculate nominal GDP, China has ~14 trillion vs the US 20 trillion. US is bigger nominally, but not far bigger.
PPP isn’t at all relevant in this discussion. People like to just bring up PPP like it’s magic, but it’s not. You have to understand the situations in which PPP is relevant and the situations in which it means nothing at all.
Moreover, you have to understand why PPP exists in the first place. Let me give you a hint: it has to do with arbitrage.
PPP doesn’t matter at all for a web company trying to make money from different countries. If a GDP is going to matter. It’s going to be the one based on an actual real number.
Yeah, if they can't pull that rabbit out of the hat, it looks a bit bleak. With US MAU's stalled for the last four quarters, they are faced with extracting more revenue from the same set of users - i.e., show everybody more ads and presumably water down the user experience in the process.
Is that true? What about Europe? I thought that Europeans have similar behavior to Americans as far as the Internet goes.
For example, about 10 years ago, Google higher market share in Europe than in America. It was something like 95% in Europe and 90% in the US. I wouldn't be surprised if that's still the case.
Of course Google's not a social network, but my very limited understanding says that Internet products generally translate well from America to Europe. I'd be interested to know where that's not true!
How is it fortunate for citizens of those countries?
If the company monetizes, but in ways that the citizens don't like, they can choose to not use services provided by the company. If they agree with the monetization practices being adequate in exchange for the services provided, they can use the services. Whereas if the company doesn't monetize in the region, they can't afford to provide services anymore, then even those people who are totally cool with the monetization strategy cannot use the services.
TL;DR: if you don't agree with the way a service is monetized, you are free to not use it (obvious limitations apply for things that are essential to living in modern society, like internet or banking; FB doesn't fall under this). Just because you are not ok with the cost associated with using that service, that shouldn't serve as a solid ground for denying service to those people who accept the cost.
Advertising on Pinterest is really tough. Their system is buggy and paying for the ad nearly impossible internationally, last time I checked. Due to these reasons, we put our all ads into Facebook instead of splitting some to Pinterest a couple of months ago.
We depend in part on internet search engines, such as Bing, Google, Yahoo! and Yandex, to direct a significant amount of traffic to our service. For example, 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.
Seems like a horrible business to invest in when you're so utterly at the whim of someone else you have no control over.
Pinterest continuing the trend of teach companies IPOing with dual class share structures:
"Following this offering, we will have two classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock will be identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock will be entitled to one vote. Each share of Class B common stock will be entitled to 20 votes and will be convertible at any time into one share of Class A common stock."
For tech companies, most people are investing in to founders - the company itself is just a medium. If I was an investor in tech company I would actually want dual class structure so its protected from short sighted bigger investors, likes of Icahn and hopefully pressure from Wall Street analysts to whatever extent possible. This puts some confidence in me as investor going for longer run.
The Indicator podcast from Planet Money covered this topic this morning. If I remember the conclusion correctly it was that these sorts of dual class stock deals were on the way out...except for tech firms.
The verdict on dual class shares is not as unfavourable as is frequently made out in the press as attested to by a recent study in the Harvard Law School Forum on Corporate Governance and Financial Regulation:
"The limited empirical evidence on the technology and emerging growth companies that are the target of these regulations is insufficient to support the adoption of new regulations, as the evidence that is available indicates that the most recent group of dual-class companies may have performed as well, if not better, than those with a single class of stock". [0].
Frankly, as a long term buy and hold investor, I actually prefer to invest in companies where the founders are solidly in control, assuming I believe in their abilities. It seems like it should free them from some of the pressure to optimize for the short term at the expense of long term success.
But if they aren't predicting profits any time soon you won't be getting dividends. And you'll only have weak voting rights with which to nudge corporate strategy.
Expected present value of future dividends of alternative entity expected to pay dividends and capital gains from said entity is less than expected future value of capital gains from a company that isn’t paying dividends, all adjusted for certain level of perceived risk of course.
The point of the structure is to maintain insider control, so when an insider want to sell some stock they do the conversation before selling to the public markets.
And it’s likely not optional. Any transfer of shares to someone who is not already a Class B holder will probably trigger a conversion. Iirc that’s how Facebook and Google’s shares are structured.
"For the year ended December 31, 2018, we generated revenue of $755.9 million, as compared to $472.9 million for the same period in 2017, representing year-over-year growth of 60%. For the year ended December 31, 2018, we generated a net loss of $63.0 million and Adjusted EBITDA of $(39.0) million, as compared to a net loss of $130.0 million and Adjusted EBITDA of $(93.0) million, respectively, in the same period in 2017"
Wow, I would love to know how they can make so much revenue and make a loss.
I only know Pinterest from annoying search results where it immediately asks you to sign up for an account, and I immediately leave - does anyone have any insights into how on earth they are spending almost a billion dollars in a year?
Curious how this would change if R&D was capitalized. Of course it would just make ebitda a less accurate proxy for cash flow but we’d still be looking at it very differently.
assuming that the R&D expenses largely convert into some kind of assets.
edit: is anyone able to comment how the accounting for this kind of thing usually works?
e.g. if a company spent $1m on R&D, can it arbitrarily add a line item on its balance sheet for around $1m of research outputs as some flavour of intangible asset? (this is obviously not a very accurate way to account for things in cases where the R&D failed to produce anything of utility, or produced much less utility that the R&D cost) or are the assets produced by R&D (if any) meant to be fairly valued in isolation from the cost to produce them?
This is called capitalizing. Companies are not allowed to do it with R&D under GAAP. But it gets tricky when one company can build a factory, call it capex, and spread the expense over 10 years. Whereas another builds software infra and must expense 100% immediately.
For those who don't seem to understand what Pinterest is aside from appearing on search results in Google, it's essentially a more photo-centric version of sub-reddits. If you're not into arts, crafts, design, or curating things, you probably wouldn't really use it.
I hate what Pinterest does to google image searching. Sometimes I really just want to paste an image src in an online discussion without having to drill into devtools.
How does it manage to rank so well? I'm not a user of it but whenever it appears in searches it feels like endless popups and walled content that tries to make you sign up. I would have thought Google would discourage links like this.
Once upon Pinterest was great. But now it's just atrocious and toxic. Even logged in.
It's the worst outcome for solving a problem which could be naturally aced on the web. Instead we got a cancered platform causing headaches to everyone.
I was curious how Pinterest addresses that in their S-1. Here’s how they put it:
> We depend in part on internet search engines to direct traffic and refer new users to our service. If search engines’ methodologies and policies are modified or enforced in ways we do not anticipate, or if our search results page rankings decline for other reasons, traffic to our service or user growth, retention or engagement could decline, any of which could harm our business, revenue and financial results.
> We depend in part on internet search engines, such as Bing, Google, Yahoo! and Yandex, to direct a significant amount of traffic to our service. For example, 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. In addition, some of these search engines are owned by companies that compete with various aspects of our business. 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. Any significant reduction in the number of Pinners directed to our website or mobile application from search engines could harm our business, revenue and financial results.
I noticed that if you just right click on the google image search result and select "view image" you'll get the img src right away, in Firefox at least.
Not just image searches, the entire website is basically unusable, especially without proper filters to block whole screen popups, unwanted login prompts, and modal windows obscuring everything. Not to mention the JS messing up the browser history so you can't go back to any page, because their scripts will fuck that up and only store the first and last page in the chain.
There is something junky about Pinterest and Quora— the experience of using it while not logged in is bad. Facebook has users in a strangle hold— afraid of alienating and being out of the loop on family affairs if they leave. Can someone convince me that Pinterest is not suceptible to an overnight diaspora if another service becomes more useful or fashionable? It’s great that Pinterest is making money but how will they defend themselves? If not, perhaps Pinterest would be a good long term short?
Plenty of folks have years worth of recipes, fashion ideas, etc. saved, so you'd need a good Pinterest-to-new-service importer, which I suspect Pinterest's API (which is, in my experience, actively hostile to developers) makes quite difficult.
Does pinterest count impressions from google images as active/distinct user? Wouldn't surprise me if they did that atrocious image search seo to juice up the MAU numbers. I probably live in a bubble but nobody I know uses pinterest.
"We review the number of monthly active users (“MAUs”), which we define as a logged-in Pinterest user who visits our website or opens our mobile application at least once during the 30-day period ending on the date of measurement [...]"
> We define a monthly active user as a logged-in Pinterest user who visits our website or opens our mobile application at least once during the 30-day period ending on the date of measurement.
smart, taking money off the market when there's still money on the market. that's the fourth notable S-1 in a month or so. if smart money cashing out doesn't signal that there's real volatility ahead, I don't know what else would.
It's weird how HN has become so negative about every recent tech companies IPO. You would think this would be the one place on the internet where people would be excited and positive about this sort of thing. I don't get it, is it jealousy about missing the boat?
The unfortunate thing about this thread (so far) is that almost every comment is either projecting the commenter's feeling about Pinterest or a few numbers on the first page. So much pessimism without citing the source within the S-1 that we're all reading!
"We have incurred operating losses in the past, anticipate increasing our operating expenses, expect to incur operating losses in the future and may never achieve or maintain profitability."
"We currently depend on the continued services and performance of our key personnel, including Benjamin Silbermann and others. Mr. Silbermann’s employment, and the employment of our other key personnel, is at will, which means they may resign or be terminated for any reason at any time."
Genuine question: is it normal for the CEO of a company in the US to have no notice period?
To be more accurate California is an at will state (for everybody: low level employees and CEO's) and non-compete are illegal. Other states are different. It exists to protect the interests of employees. The flipside is if you do resign you don't have to wait 2 months before you leave. It is good practice though to give at least a two week notice.
My understanding was that in At-will states, an employer-employee relationship could be terminated without reason or notice unless there is a contract in place that says otherwise. My (naïve) presumption was that companies would want to put these kinds of contracts in place for their senior leadership.
Those contracts are not enforceable. I guarantee you a win 100% of the time in California.
There are several exceptions:
1) you are the CEO or a top exec in a VERY large company. In that case your personal lawyers are involved in the negotiation of the contract, and it is assumed that you know what you are doing. But even in those rare cases, the law in on your side.
2) a non-compete COULD be part of the sale of your company (I wrote YOUR company, you own it, and your are not merely an employee, even senior employee).
Don't confuse that with the IP rights you give up to the company (legales like like we own EVERYTHING you have created or will create). You can still quit tomorrow with no notice given and work for whomever you feel like. Don’t use that IP, and don’t take ANYTHING with you (no files, no customers lists, no lines of code, no presentations, no emails). Then you are fine.
by default every employee in the US is "at-will" and can quit or be fired at any time unless they have a contract or are in union which has a contract.
Maybe for a CEO I’d understand but being a regular employee and knowing that you could be out of a job and pay at any time, for any arbitrary reason or no reason at all, without being able to do anything about it seems like such a shaky foundation to build your life on...
That's pretty standard for the United States. On the flipside, it means the employer isn't required to keep employing you no matter what. Most unions will negotiate it (this is why Police go on paid suspensions instead of being fired, it's part of their CBA), but the vast majority of us aren't members of a union. Furthermore if you're terminated without cause, you're eligible for unemployment.
In practice companies don't fire people left and right, and people don't live in constant fear of being terminated if they're providing value to their employer, or their employer isn't toxic.
"people don't live in constant fear of being terminated if they're providing value to their employer,"
That has almost nothing to do with being laid off or not. Most layoffs kill whole departments or divisions and the contribution of the little guy matters not a single bit.
I knew that – for better or worse – this is common for many employees in the US, but had always assumed that companies would want more security with their senior leadership. Thanks; TIL.
I’m in the US and know it exists, but I don’t know anyone who uses it. It seems like it’s used predominantly by women to collect and share photos taken by other people (e.g. photos of clothing, makeup, fashion models, crafts, weddings, food, etc.).
The fact that I don’t know anyone who uses it does not imply that Pinterest is unpopular. I just know so few women.
Pinterest is relevant and generalist enough to be useful to most people, allowing different usecases from a free cloud storage of pictures to a social network.
Is there like an S-1 team that does graphic design for everyone's S-1 these days? Lyft's S-1 has the same designs: pages of pictures of happy people/drivers, a full page mission statement in a sans-serif font on a solid background of color, similar page with numbers on it...
How does tech IPOs even with very poor outlook and no potential to become big actually go through anyway? I can't imagine myself buying stock of many recent filings but apparently tech IPOs seems to be rarely failing even though many seem to be designed purely as VC escape hatch. So who really buys all these stock?
I've started wondering if they're using something like StyleGAN to general endless image variations that exist nowhere else (and have no source or context on pintrest) in order to pollute google image results.