Pinterest the smartest startup in Silicon Valley

Silicon Valley home to the most startups in the world. Many who fade away silently, others who burn through investor cash only to fizzle. Some make it some don’t. Even when startups survive it usually takes a period of a few years before they are profitable. No one knows for sure but Pinterest could already be profitable with ~10 million users.

Its been revealed that Pinterest has been utilizing a service called SkimLink to replace outgoing links with affiliate links to products related to the items pinned. When I heard this I thought it was one of the most brilliant ideas I ever to monetize a website. No advertising means better rankings and an improved user experience. So far Google doesn’t seem to have any issues with these type of affiliate links and a “no-follow” link is used on any affiliate links by SkimLinks as a precaution.

Pinterest and SkimLinks have just created a new business model. 80% Percent of the users on Pinterest are women aged 24 – 54, and I would even guess that a good chunk of those women are stay at home moms and in general mothers. They make the buying decisions and are more likely to look for a deals and make purchase online. It’s already been established that Pinterest can be a huge referrer of web traffic. We have seen a nice spike in search traffic for our Pinterest Joomla Module.

It almost seems like some people are bothered by the lack of disclosure of this practice of using SkimLinks. Personally I feel that the longer this was secret the more of a competitive advantage Pinterest has. Why would they disclose a clever tactic for making money on the internet? The internet is full of copycats. Remember that Pinterest users are getting a free service that is in private beta. Facebook is making money from their users, McDonald’s isn’t telling you everything that is in that hamburger, and Apple doesn’t disclose their manufacturing practices. If anything I think the founders of Pinterest are brilliant entrepreneurs.

Overall the concept of the website alone is compelling and you will find that the users of Pinterest are very enthusiastic about the service. The user behavior on Pinterest is unlike that of Facebook or Twitte users spend over 15 minutes per visit on the website pinning and repining content of their own and people they follow. Users can pin interesting content they find on the web or pictures that they take. Currently recipes are the most shared content on Pinterest. With a unique design, exploding user base, and monetization plan in place Pinterest is poised to be a hugely successful start up. The real question is who will next to replicate this business model.

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