Pinterest raised $200 million in a financing round that values the company at $2.5 billion. The funding was led by Valiant Capital Management, San Francisco-based Pinterest said on Feb. 20 in an emailed statement, according to Bloomberg. For comparison, Twitter is valued at about $9 billion.
To drive such a valuation of this magnitude, investors likely see Pinterest as being able to drive massive amounts of revenue and growth. For now, Pinterest certainly has the latter covered: Nielsen reported in December 2012 that the social site boasts the largest year-over-year increase in audience—1,698%.
What may be driving Pinterest's revenue potential is its new focus on catering to businesses, which should perk up the ears of PR professionals. In November 2012 Pinterest introduced business accounts, which provided registration for a business name only (not first or last name of an individual); an updated Terms of Service to officially allow for commercial activity on the site; and Pinterest's business microsite, which displays case studies from brands like Etsy and Jetsetter, and best brand practices and guidelines.
This was a statement that Pinterest is “open for business,” says Monte Lutz, executive VP, social strategy and programming at Edelman Digital, who spoke to PR News late last year about the PR potential for Pinterest. “These changes show that Pinterest is becoming more open to partnering with and promoting brands,” he says. Ultimately, Lutz says, the company will need to demonstrate that it can turn visual conversation into revenue conversion.
Alex Nicholson, VP at Cone Communications, says there are three trends that are fueling the growth of Pinterest:
The launch of private boards. This lets users set up boards that can be seen only by them and others they choose;
An increased focus on posting original content, “so brands don’t get caught up on rights issues,” Nicholson says; and
Subtle product placement in pins. Beauty or food brands are featuring more and more products in the shots.
As Pinterest evolves from a creative startup into a bonafide (and possibly publicly traded) company, it should remain a key outreach tool among PR pros (unless you're preparing for another tech bubble to burst, of course).
PR pros looking to perfect their Pinterest prowess can register for PR News' Big 3 Conference, which takes place on April 18 in New York City.