Business Overview and Segments
This is the company that owns the up-and-coming platform – Pinterest. The business is pretty simple – they earn money from selling ads on their platform, and most of their expenses are from the costs of running the platform. So its important to remember here that although it’s a social media company, its actually an advertising business – so the more people on the platform, the more advertising dollars that come Pinterest’s way.
Switching – as people use the platform they end up accumulating lots of content in the form of saved ‘Pins’. Since it would be truly difficult to get all this content on another platform, people are unlikely to want to switch from Pinterest to another similar platform purely because all their content is already saved on Pinterest.
Network Effects – the more people on the platform, the more content, the more appetising the entire platform becomes, which in turn draws more people onto the platform.
Brand – Pinterest has one of the highest ratings amongst all social media platforms, and in a world where social media is constantly under fire for scandals, this is truly valuable.
Key Figures
| Risk of Bankruptcy | Low |
| Last Year’s Growth | 51% (High) |
| ROIC (Company Quality) | N/A – Money-Losing |
| Free Cash Flow Margin (Company Strength) | N/A – Money-Losing |