By all accounts it has been a rough year for Pinterest.
While the seventh most visited social media site has toiled since 2005 to morph its popular vision boards into something more profitable, the past 12 months have seen its stock plunge by 70% and its most recent earnings deliver a 9% decline in monthly active users and a $5 million loss.
It is amid this backdrop that the San Francisco-based digital platform has made a major move to get its overwhelmingly female user base purchasing — rather than just pinning — via the acquisition of The Yes, an AI-driven fashion platform that touts itself as “the first and only shopping experience that learns and gets smarter” with each visit.
“Pinterest believes that THE YES’s leadership, innovative technology and talented team, combining shopping expertise with fashion industry credibility, will help accelerate Pinterest’s vision for it to be the home of taste-driven shopping,” a company statement released late Friday (June 10) afternoon announcing the completion of its acquisition in less than two weeks said.
In acquiring the online shopping site for an undisclosed sum, Pinterest stressed that it was building a destination that combines commercial intent with a magazine-style ability to shop products, noting that the integration of the rapidly announced and closed deal would commence immediately.
“Over the next few months, Pinterest plans to sunset the THE YES app and website to allow the merged teams to focus on technology integration and evolving Pinterest’s shopping vision,” the statement said without providing further details.
A Pin Drop
To be sure, Pinterest is not the only digital platform that has fallen out of favor on Wall Street this year, as segment leaders such as Meta and Snap and others have been cut in half this year too. At the same time, the retail patch itself has also been hit hard this year, with online giant Amazon falling 35% and niche marketplace Etsy falling 65% so far in 2022.
In fact, even in its currently reduced capacity, Pinterest’s $13 billion market value is still worth twice as much as traditional retailers such as Macy’s and Kohl’s and is more than one-third larger than Etsy.
While Pinterest did post a decline in users, its Q1 total revenue still rose 18% and its average revenue per user (ARPU) was up 28%, Co-founder and CEO Ben Silbermann sees the addition of the 4-year-old digital retailer as a game changer.
“THE YES team are experts in building an end-to-end shopping experience,” Silbermann said in the original joint statement announcing the deal, pointing to hundreds of brand name merchants on its platform, as well as its “extensive fashion taxonomy” that uses human expertise and machine learning to power a its fashion algorithm.
“They share our vision of making it simple to find the right products that are personalized for you based on your taste and style,” Silbermann added.
Whether this push to move product and, in turn, entice more brands to connect directly with its users will deliver the profitability and traffic it needs, there is little argument that something drastic needed to be done, to jumpstart Pinterest’s business and boost its bottom line.