Pinterest files to go public

The last Silicon Valley company to request an initial public offering is Pinterest, the social network and the San Francisco-based image board that in recent years has created a large advertising and commerce business based on its growing user base. The company, although still not profitable, says it obtained more than $ 750 million in revenue last year, and that it has reduced its losses from nearly $ 200 million in 2016 to just under $ 75 million annually. Pinterest says that, in fact, it was profitable in the fourth quarter of 2018, but not profitable enough to leave the network throughout the calendar year.

The company plans to go public on the New York Stock Exchange. Joins Uber and Lyft, giants of horseback riding, the delivery company Postmates, the Slack communications platform, the hotel and a short-term rental service Airbnb as one of the many companies in Silicon Valley plan an IPO this year (or next) that could drastically shake the landscape of the Bay Area.

Pinterest, which was launched in 2010, primarily earns money by attracting advertisers to its platform, where users create dashboards in which their interests are identified and through which advertisers can try and sell products. Pinterest says that its more than 250 million monthly active users have created more than 4 billion boards with an accumulated 175 billion saved pins. The platform itself has processed more than 2 billion searches, many of which Pinterest attempts to process visually using methods based on machine learning such as recognizing objects and images.

Indeed, Pinterest does not compete as much with Facebook or traditional e-commerce sites as Amazon, but with search engines and search-based product advertising tools, as well as with Sites that heal manually or algorithmically products against which advertisers can post ads. "We mainly compete with Internet companies that are tools (search, e-commerce) or media (news, videos, social networks)," writes Pinterest in its S-1 file.

"In this way, Pinterest is unique." The company argues that most consumer Internet companies are tools (search, e-commerce) or media (news, videos, social networks). "." Pinterest it is not a pure media channel, nor is it a pure utility, it is a media-rich utility that satisfies both emotional and functional needs by solving a widespread consumer problem that is not addressed by many other platforms. 19659007] That makes one of its main competitors Google, but also increasingly Instagram as Facebook moves to monetize its image exchange network as a type of visual search engine that helps people find and buy products according to their interests, and the interests of influential people and celebrities who follow.

Pinterest describes a number of other obstacles that it faces in the future in the risk factors section of your S-1:

We are in the early stages of our monetization efforts and we are still growing and expanding our revenue model. Our growth strategy depends, among other things, on attracting more advertisers (which includes serving more advertisers in the middle and non-managed markets and expanding our sales efforts to reach advertisers in additional international markets), scaling up our business with the existing advertisers and expand our advertising product offerings, such as self-service tools. There is no guarantee that this revenue model will continue to be successful or that we will generate growing revenues.

Pinterest also says that ad blocking tools can, in the future, hurt your profitability. "Existing ad blocking technologies that have not been effective in our service can be effective as we make certain product changes, and new ad blocking technologies can be developed," explains the company.

To further complicate the matter, Pinterest's confidence in the largest players of technology platforms. "Developers of web and mobile browsers, such as Apple, Microsoft or Google, may implement changes in browser or device functionality that impede our ability to measure the effectiveness of advertising on our platform, including by limiting the use of third party cookies or Other Tracking Technology. " Pinterest specifically mentions the changes that Apple made in its Safari browser two years ago to reduce ad crawling.

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