[its_so_on]

Let me help you out with this part "Is it worth $1.5B?"

If you are left holding the bag, and they have to generate 1.5B in sales over their lifetime from this money to make it a worthwhile investment, then no: pinterest will never accrue 1.5B in revenue over its lifetime.

If you are not left holding the bag and this bubble keeps inflating, yes. It's easy to see how Pinterest can raise money at an even higher valuation with just a little more "spectacular" growth. (It's not really spectacular. More like a fad.)

[emmett]

On what basis could you not have said the exact same thing about Facebook 5 years ago?

[its_so_on]

I don't remember where I was five years ago and what Facebook was saying, but if you look at this graph http://en.wikipedia.org/wiki/File:Facebook_popularity.PNG at 2007, and remember what Facebook is (since day 1), it's pretty easy to see Facebook making the argument that it will be used by pretty much everyone, everywhere. It's pretty obvious that pinterest has no such claim. That is one such basis.

Other such bases include network effects that come with the whole Facebook model (what it is, i.e. social graph) and that in some way it may even be a "natural monopoly". (People completely miss this when comparing it to myspace, which was never a literal, programmatic social graph).

Finally, again I don't know where this was five years ago, but credibility and buy-in based on how Facebook rolled out (Harvard, universities, etc...) may have been a factor.

Also due to the Facebook model it doesn't make sense for ANYONE to start a profile on a site that doesn't have any profiles on it. It's all about having friends on there. By contrast, Pinterest has already been ripped off by the German Pinspire: http://www.readwriteweb.com/archives/pinspire_the_hottest_ne...

If I want to sign up on Pinterest, I can sign up on Pinspire and it still makes SOME sense. (As opposed to signing up to a competitor to Facebook when all my friends are on Facebook).

So, there are several bases that I could have used to put Facebook at a completely different valuation.

Mark my words: (you can bookmark this). Pinterest will not make 1.5Billion in revenue over its whole lifetime, unless the bubble keeps expanding and it gets at a similar amount of cold, hard cash to spend on customer acquisition: the "Groupon model". (Which I consider possible! See my comment you replied to. I am definitely not saying that it can't get another investment at a 50 billion dollar valuation and make the people who just invested 200 million very, very happy. Nor am I saying it won't be able to use the fifty billion dollar valuation. I am saying that, indeed, it depends on it - or will never be able to justify the 1.5billion valuation it just received.)

In other words, yes, I am saying that it will not be able to turn the 200 million it just raised into 1.5 billion cash over its whole lifetime, without raising more money.

You might disagree with me, but at least I am being direct and not wishy-washy. You can falsify me soon enough if you are right.

[jamiequint]

You're being pedantic about the 5 year thing, if anything Pinterest's current growth outpaces that of Facebook. At 2 years old they're sitting at somewhere around 30M users, even Facebook didn't grow that quickly (per your own graph).

In addition, Pinterest sits much closer to transactions than Facebook does. Facebook currently makes around $5/user/year, just given Pinterest's proximity to the transaction its relatively easy to imagine how they could hit a 3-5x multiple of that. It's feasible that Pinterest could hit Facebook style revenues at 1/4 of Facebook's userbase, and they are already 1/30th of the way there. With this investment thesis $1.5BN is a hell of a deal.

Right now I think there are only two real major risks (neither of which I personally believe to be true): 1. Pinterest may be a fad with no staying power. 2. Pinterest has a much smaller target demographic than Facebook and their growth may soon cap out.

With regards to your argument about Pinspire that's just bogus. There were plenty of Facebook clones that got early traction in other markets, none of them won.

You may be direct, but you're getting down voted because your 'argument' is nonexistent and lacks any real substance. (For one, no pure software company is taking a 1x multiple) The reality is that Pinterest is probably already undervalued at $1.5BN and barring the risks above coming to fruition has a real shot at becoming worth $25BN+ within 5-7 years based on revenues alone.

[objclxt]

I don't think the OP is being pedantic: you're wrong to compare the first two years of Facebook with Pinterest.

For one thing, Facebook was .edu limited for its first two years, so its growth was constrained. Rather than that, look at Facebook's growth from 2007-2009.

[mccon104]

Why is everyone in such a rush to compare this to facebook? I believe emmett was just trying to point out that OP's argument was essentially "they're not going to make $1.5b ever, trust me". Which frankly sounds a lot like "No wireless. Less space than a Nomad. Lame."

To give such a definitive "never" answer and say their only hope is if the "bubble keeps inflating" without offering a shred of evidence makes you sound like any critic of anything that has ever gone big.

If you're going to educate me re: the valuation, then by all means educate me. Don't give me some confidently worded finite opinion and expect to pass it off as fact.

[tommorris]

Hey, Pinterest being cloned by Pinspire? Google "pinterest for porn". It's an easy enough model to clone. So is Flickr and Wikipedia (hey, they'll give you the software for free!) and lots of other sites, but it's hard to recreate the same passionate community.

I think the important value that Pinterest has is the community of pinners and their collective aggregated opinions. That community has the potential to actually be quite a useful testbed and market research mechanism (or even sales channel) for a lot of consumer brands. Maybe not $1.5bn worth of value, but there's quite a bit of space in the social web for more of a female-oriented, arts-and-craftsy, fashionable, aspirational type of site.

Go to your local magazine seller: there's a lot of women's oriented magazines, lifestyle oriented magazines... that's where I think the value in Pinterest is, as a sort of online complement to "aspirational lifestyle" brands.