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On Startups: Advice and Insights for Entrepreneurs: Dharmesh Shah: Amazon.com: Kindle Store

Note from the AuthorHi, my name is Dharmesh, and I’m a startup addict. And, chances are, if you’re reading this, you have at least a mild obsession as well.This book is based on content from the OnStartups.com blog. The story behind how the blog got started is sort of interesting—but before I tell you that story, it’ll help to understand my earlier story.As a professional programmer, I used to work in a reasonably fun job doing what I liked to do (write code). Eventua...

damienarlabosse

Could Pinterest's revenue model be through Sponsored pins?

Pinterest is no longer using Skimlinks, and they probably realized that affiliate marketing did not perform too well as a revenue model for their platform.

Why?

Because Pinterest is a discovery engine. People are not in the mindset to buy when they browse Pinterest, and most pins are not products anyway. This means, a low click through rate (CTR) and verly low volume of sales (low conversions), on top of which they need to split the commissions with Skimlinks. That's not much left.

Pinterest needed to clean up the drama, so they added a new topic "How does Pinterest make money?" on the help page section. Time to move on.

What users need to understand is that Pinterest will test making money, because like any other startup, Pinterest needs to make money at some point to be a sustainable business.

But what will be the right advertising model for Pinterest when brands/marketers take over the site?

I bet on "Sponsored" pins.

Pins that would be relevant to a pinboard, targeted to specific users/visitors demographics and do not disrupt the discovery process of users, actually add quality to it by helping discovering new products for example.

It took over a year for Twitter to test and build their advertising app, so it probably will take a couple months for Pinterest to build an interface to allow brands and maybe small businesses to advertise on their site.

damienarlabosse

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