Pinterest isn't sure how it is going to make money

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Is that really a surprise? Pinterest already blew off any expectations they could have had in terms of building a valuable destination for millions of internet users. Their stats are more impressive than Twitter's at the same running point. Making money is much simpler than driving millions of users to a website everyday. 

There is one problem: The 16-person Palo Alto, Calif., start-up isn't sure how it is going to make money.

"Pinterest's monetization strategy isn't in the oven and it's not even off the baking table," said Jeremy Levine, a board member of Pinterest and a venture capitalist at Bessemer Venture Partners. "We have one hundred ideas but no execution as of yet."

This is your common startup problem when you offer a free service. Although in this specific case, i think there is a huge opportunity for brands to advertise on it. Fashion advertising can drive high revenues.

The prospect of making money off of social-networking sites, which are usually free to users, has been a challenge. The options for Pinterest suggested by analysts so far, which center around selling targeted advertising and data on users' interests, aren't terribly original and run the risk of alienating users—problems faced by bigger social-networking sites such as Facebook.

Source: online.wsj.com →

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