Next on Deck for Snapchat and Pinterest: Some Sales Help?
Earlier this week, AllThingsD broke the news of two major fundings of a pair of hot startups: Scrapbooking service Pinterest and messaging service Snapchat.
Pinterest’s round of $225 million at a $3.8 billion valuation was confirmed by the company, while Snapchat declined to comment on one it is working on to raise several hundred million dollars at a $3.6 billion one.
But numerous sources said the Los Angeles-area company was indeed talking to an Asian strategic investor — AllThingsD named China’s Tencent as the likeliest candidate — and others about the funding.
The news quickly brought out the expected agonizing about the creation of yet another bubble in tech investing, a meme that was especially underscored by the fact that neither company makes any revenue to speak of, if at all.
That might change soon, though. Or, perhaps more precisely, it might have to, unless either sells to a bigger player.
And, in fact, sources said that Pinterest, which has already been experimenting with unpaid advertising, has been conducting a search for a top-notch exec to head sales, and has talked to a range of candidates, including from both Google and Facebook.
The goal, said sources, is to begin to put in place a sales organization to take advantage of its fast growth.
Pinterest has certainly seen that, as consumers have flocked to the free site on which they “pin” photos of their interests and share them widely. Usage has exploded since it was founded several years ago; it has also become an increasingly key driver of traffic across the Web to other sites.
While comScore showed Pinterest had 24.9 million unique monthly users in September, that is only in the U.S., and is desktop-only. In March alone, after mobile and international is added, it had close to 50 million unique monthly users worldwide.
To take advantage of that user base for revenue, the company just started its first test of advertising, called “promoted pins,” which appear in search results and category feeds.
But it remains an unpaid trial, according to the extensive disclosure post, personally penned by Pinterest CEO Ben Silbermann, that tried to ease users into the idea of advertisers having any place at all on the site.
Still, as with Facebook’s Instagram, advertisers are interested in finding new ways of reaching consumers in innovative ways. Pinterest, essentially, is building the ultimate personalized catalog of the digital age.
Snapchat, on the other hand, is building a service based on images that self-destruct, not exactly a formula that advertisers can grok as yet for marketing opportunities.
Launched in 2011, it has grown popular in a relatively short span of time, effectively creating an entirely new genre of messaging category with its “ephemeral” pictures and videos that last only a matter of seconds. As AllThingsD previously reported, the trend has attracted acquisition attention from Facebook.
In the summer, co-founder and CEO Evan Spiegel said the service had 200 million pictures and video taken by its users on a daily basis, up from 150 million just months before. Then, at the TechCrunch Disrupt conference in September, he said that the number had grown to 350 million self-destructing messages daily.
Such wildfire growth prompted Spiegel to note various ideas about monetization, including experimenting with bands, and listening to music inside the app.
In fact, in-app purchases are a specialty of Tencent, one of Snapchat’s possible new investors.
So far, though, a Snapchat spokeswoman said it had not hired any sales execs, and was not currently looking for a big name. She noted that it has added a head of business and monetization, Philippe Browning, a former VP of advertising and operations for CBS Mobile, this year. But he is not in charge of any sales effort, instead focusing on ideas for monetization.
Still, in a June interview with Forbes, Spiegel said that he “previously directed all emails from interested marketers into a dead-end mailbox. Those emails now go to Browning.”
A step forward, I suppose.