CNBC Disruptor 50

How Pinterest makes money: By filling your feed with promoted pins

How Pinterest makes money by filling your feed with promoted pins

Pinterest will debut on the stock market on Thursday at an initial valuation above $10 billion. In its IPO filing, the company said it lost $63 million last year on revenue of $756 million in revenue, with revenue growth of 60%. 

So where does this money come from? 

The social network has 265 million monthly users who bookmark images they find online by "pinning" them to themed inspirations "boards." That large user base is two-thirds women, and is highly valuable to advertisers. Pinterest sells targeted ads called "promoted pins" that appear at the top of users' feeds and search results. Those ads brought in about $3 per user in 2018. It also sells click-to-buy shopping ads to businesses and hundreds of retail partners.

Pinterest was growing rapidly in 2012, but a recent CNBC report found that expansion was slowed by a cautious and sometimes overly passive culture at the company.