The scrapbooking site's valuation shot up 32 percent in 7 months. Investors clamor for startups despite the spring selloff in tech stocks. Fred Katayama reports.
You'd think the spring selloff in tech stocks would sap interest in startups like Pinterest. But no. The scrapbooking site's valuation shot up 32 percent since October to $5 billion based on its latest round of fundraising. During that period, the Nasdaq rose just 4 percent. Pinterest plans to invest the $200 million it just raised in technology, improving its advertising and expanding overseas. It's not alone. Other newbies like home-rental site Airbnb and online storage company Dropbox have nabbed valuations double that of Pinterest or more. And Bloomberg reports that the car ride service Uber is also seeking to raise more than $10 billion. Never mind that Pinterest reportedly doesn't have much revenue. It was just this week that it began rolling out advertising with brands that include Gap, Kraft and Target. Those advertisers pay Pinterest to promote their images. Pinterest is also pinning its hopes on search - but search with an element of discovery. Its mobile app allows users to search for images using keywords, such as "breakfast," then refine those results, leading to, say, "pancakes," then a recipe for a multi-colored pancake. Hey, Pinterest, how about doing a search for "revenue?"
The reporter's pointed comment about "revenue" is meant to draw attention to the fact that, despite its huge valuation, Pinterest (much like other Internet phenonema such as Twitter and Instagram) makes almost no revenue.