Original URL: http://www.theregister.co.uk/2013/02/06/pinterest_billions_valuation/

Profitless internet biz Pinterest seeks $2.5 BILLION valuation

Who could put a price on cupcakes and kittens?

By Brid-Aine Parnell

Posted in Financial News, 6th February 2013 12:16 GMT

Online scrap repository Pinterest is trying to raise a new round of funding that would value the as-yet-profitless firm at $2bn to $2.5bn.

Undeterred by the lack of an actual business model, the cupcake and kitten scrapbook firm reckons that existing backers like venture firms Andreessen Horowitz and Bessemer Venture Partners, or alternatively new investors, will happily hand over the billions, people familiar with the matter told the Wall Street Journal(paywall).

Pinterest has yet to make any profit or even any revenue, but on the upside, it doesn't really have that many costs either, barring servers, storage, software engineers and other staffers.

The company has made some moves towards money-making by allowing corporate accounts to brand their scrap-streams and be ticked as official, which could potentially lead to firms selling things through the site and giving Pinterest a cut. Inevitably, the scrapbook site is also considering advertising as a potential revenue stream.

Pinterest has also expanded itself into a steadier looking firm, going from its founders and 20 or so workers to a decent-sized hundred employees, some snagged from Facebook and Google, housed in a big open space - perfect for beanbags and collaborative working no doubt - in San Francisco.

However, the whole system of forking out billions of dollars on the strength of users who have yet to pay a penny for services has been questioned a little more closely recently, after less-than-convincing moves into decent profits by the likes of Facebook, Zynga and Groupon.

All three debuted in the market in a blaze of glory that quickly burned out - for Facebook within the very first day. Once shares were being traded, closer scrutiny of their business models showed a lot more uncertainty over just how exactly their millions of eyes could be turned into decent profits. Users have so far resolutely resisted attempts to ask them for money for what they once got for free or attempts to make them put up with swarms of advertising across their once pristine pages.

Pinterest does have slightly more going for it, already showing that its content can be at least linked to money. On the holiday online sales day known as Cyber Monday, the number of referrals for products that came from Pinterest more than doubled from the same day the year before, according to Adobe's Digital Index. ®