[abijlani]

The justification for this frothy valuation is that somehow they will turn the browsers of pictures into buyers of products. It is a difficult task and wish them luck but I still don't understand why they would need $120 MM to accomplish it.

[fusiongyro]

"Turning the browsers of pictures into buyers of products" is an excellent turn of phrase, but I think it kind of misses the point. In actuality, Pinterest is about to become the HSN of the internet. It plays to all of Facebook's weaknesses:

- Pinterest makes money on sales rather than ads, through referral links

- Pinterest makes identical money on users with accounts and anonymous users

- Pinterest has exactly the users who have money and want to spend it

- Pinterest runs on greed, envy and materialism rather than lust and boredom

It will be interesting to see how it plays out. They've already had a big setback in that they were rewriting or inserting referral links and they had to stop. I'm not sure what the conception is moving forward, but I'm sure $120M will help them figure it out. Unlike a lot of the other big names being bandied around now, there is a sense that they're trying to build a company rather than find the fastest largest way to sell out.

[mibbitier]

They need it to IPO or to sell to a bigger fool.

[dcaranda]

We don't know if some of the $120MM is for secondary / cashing out existing investors / employees.

[drivebyacct2]

Why is that the justification exactly? Seems like they have a variety of monetization options. That's one, but it's not the one I was thinking of and it would require a lot more work with more risk than other alternatives.