MarketWatch First Take: Pinterest’s new CEO faces severe highway in removing users to buy instead of only pinning

Pinterest Inc.’s incoming Chief Executive Bill Ready will face some vital hurdles during his new gig, in that he is clearly being tasked with remolding a scrapbooking/pinning site into some-more of an e-commerce player.

On Tuesday, Pinterest

co-founder Ben Silbermann pronounced he was stepping down as a company’s arch executive, a post he has hold given a San Francisco company’s initial in 2010. Silbermann will sojourn on Pinterest’s board, that Ready will join. Ready was formerly boss of commerce and payments during Alphabet Inc.’s


Google division. Pinterest co-founder Evan Sharp stepped down final Oct to join former Apple Inc.

pattern guru Jony Ive’s association Love From.

Silbermann told a Wall Street Journal that he believes “Bill’s indeed going to be a improved CEO than we am for this subsequent chapter.” Investors clearly believed that Ready will be a improved claimant for this subsequent phase, promulgation Pinterest shares adult scarcely 4% in after-hours trade Tuesday.

Success in that subsequent chapter, though, is easier pronounced than done. The association has dual point issues. The many evident is that a stream user bottom has declined after a pestilence surge, as seen in a initial entertain when a tellurian monthly active-user count declined scarcely 10% to 433 million. While first-quarter income of $575 million grew 18% year over year, it fell 32% from a December-quarter income rise of $847 million.

But a bigger emanate forward is a company’s enterprise to reconstitute itself into a place to buy things, instead of a scrapbook to share images of design, decorating and conform ideas from calm pinned by users — some of that eventually lead to passed links, or some-more often, equipment that can't be purchased. Its stream income comes from advertising.

Indeed, Pinterest has done moves in a past year to get a users to do some shopping, and some ads lead to product websites. But Pinterest is not accurately tip of mind among consumers for online buying. It has been beta contrast a product called Your Shop, a personalized selling page customized to users’ activities and preferences, with a approach purchasing choice for Shopify merchants within a app.

PayPal Holdings Inc.

last Oct reportedly done an proposition to buy Pinterest, in a hopes it could spearhead this change into e-commerce. But a understanding did not happen, after a payments company’s shareholders balked during a idea, according to a Journal.

In a note final year by Bernstein Research analysts on because a PayPal/Pinterest compare was not done in heaven, they remarkable a crux of a emanate Pinterest faces in this ascending battle: “User function on internet platforms is notoriously formidable to change – it’s honestly misleading either Pinterest’s 454 million MAU [monthly active users] will meaningfully change their function down-funnel toward purchasing vigilant even presumption PayPal could expostulate aloft merchant/product adoption.”

Hiring an executive from Google is clearly a outrageous step in right instruction toward achieving a idea of apropos an tangible selling site. But with confirmed Pinterest user behavior, and as a economy slows and consumers solemnly lapse to brick-and-mortar stores, Ready faces a severe highway ahead.

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