Wednesday, April 11, 2012
5 Reasons Google Should Buy Pinterest
Google has never been able to figure out the social media space, but it’s always been good at figuring out acquisitions. Pinterest has burst onto the scene, and it already has a sky-high valuation. Meanwhile, Google has an absurd amount of cash. Could this be a match made in heaven?
Check out FIVE reasons why Google should by Pinterest, thanks to Henry Blodget, Business Insider, with a bit of color from me.
1. Pinterest is hot right now: and Google, in social, has never hot. If it moves early, it could add an important new social network to its portfolio before the price gets absurd or the competition for the acquisition too stiff.
2. Looking ahead: Pinterest is still young and small, with around 11 mn users. If there were ever a time to get in, this is it. Buy getting into Pinterest early, Google may be able to use the start-ups growth to accelerate farther forward into the social media world.
3. Visualize results: have you noticed the point of the new Facebook Timeline feature? It’s all about photos. The visual impact is what matters. Pinterest takes advantage of this and makes it easy.
4. It’s like YouTube: Google got into YouTube early – and ‘boldly’, according to Blodget – and then it ‘didn’t screw it up.’ Many scoffed at the $1.7 bn acquisition, but ultimately it worked. Pinterest could be ‘YouTube redux’.
5. Google search on Pinterest content: it’s a pretty attractive prospect, right? According to Blodget, ‘Google will be able to marry its amazing algorithmic revenue engine – one of Google’s core strengths – to Pinterest’s new social distribution engine.’ Even if it’s as simple as Google AdWords on the Pinterest platform (Pinterest is already doing something like this), the case may be compelling.
And, let’s not forget: Google has the money. The company is sitting on a boatload of cash – $45 bn – that it needs to make productive. So, if the Pinterest founders dig in their heels, Google has an effective way to pry them free. Blodget suggests a $2 bn price tag to get the deal done on a company that has yet to reach two years old.
By tom johansmeyer - Inside IPO