Slow growth, declining number of users, plummeting valuation… Pinterest is looking for inspiration to relaunch.
The photo-sharing platform published its results for the second quarter of 2022, which ended at the end of June, on Monday, August 1. It recorded a turnover of 666 million dollars (+9% in one year) for a net loss of 43 million dollars.
On the user side, the US company claims to have 433 million monthly active users worldwide, 5% less in a year. This drop is attributed to “declining search engine traffic (largely due to Google’s algorithm update in November 2021)” but also to the “persistent impact of the pandemic slowdown (… ), which had consequences for user engagement, details the letter to investors.
The aftermath of the pandemic
Pinterest has failed to capitalize on the interest generated during the coronavirus pandemic. Like most social networks, it saw a jump in its activity during this period: the successive confinements had pushed users to take refuge behind their screens.
Launched in 2010, the platform was profitable for the first time last year with a profit of 316 million dollars for a turnover of 2.6 billion (+52% in one year).
Persistent takeover rumors have surfaced. In early 2021, Microsoft was reportedly willing to shell out $51 billion to get their hands on Pinterest. A few months later, it was PayPal’s turn to participate in it for 44 billion.
Since the platform is completely free for users, its monetization is based solely on viewing ads. Like other tech giants, Pinterest now faces slow growth due to advertiser reluctance.
Many of them “have cut advertising spending due to concerns about weakening consumer demand,” the document continues.
Something to worry the markets about. Valued at $13.14 billion, Pinterest saw its shares drop more than 65% between February 2021 ($85.90), at its all-time high, and this month ($19.99).
Diversification towards electronic commerce
In order to diversify its sources of income, the “lifestyle” platform has started a turn towards e-commerce since 2019. The declared goal: to go from inspiration, by simply consulting photos, to purchase in a few clicks.
That’s why Pinterest partnered with the online sales platform Shopify in 2020. To lower the barrier to purchase, the site now offers to purchase the products you see in the images by clicking a link that leads directly to Pinterest’s website. the advertisers.
To speed up this transition, new features were rolled out in early July: a shopping tab on merchant profiles, allowing them to more easily display products to buy, or even augmented reality to view a product in-situ for US and UK.
Fierce competition between social networks
As the competition between social networks becomes increasingly fierce, Pinterest is forced to renew itself.
The advertising market is dominated by the Google-Facebook duopoly. Instagram, which also focuses on lifestyle issues, benefits from the firepower of Facebook to build online sales without leaving the app.
As for TikTok and Snapchat, popular for their short video format, they have become the apps to imitate. In its letter to investors, Pinterest acknowledges “the impact of competition on the proportion of time spent [par les utilisateurs] on video-centric platforms.
A reorganization underway
Faced with their challenges, co-founder and CEO Ben Silbermann was ousted. He was replaced in June by Bill Ready, the former president of Google Commerce. The activist fund Elliott, known for targeting tech companies for profit, said on Monday August 1 that it had acquired 9% of Pinterest.
“I don’t subscribe to a race for growth at all costs,” said Bill Ready after the publication of the quarterly results, reports the Wall Street Journaland added that he would look closely at spending to boost profitability next year.
Source: BFM TV
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