Just in case you haven’t heard, Pinterest is currently one of the hottest startups. In fact, based on data from ratings firm comScore, it is the third fastest growing site in the U.S. So, apparently if you haven’t jumped on board with it, you should.
However, as with so many startups, Pinterest‘s blissful beginning was slightly interrupted earlier this month after Josh Davis of LL Social revealed that it was using affiliate marketing tactics to make money. Based on his findings, Pinterest was using a service called Skimlinks to add affiliate links across its site.
In Davis’s initial post, he wrote:
Pinterest doing this is big news in my opinion for two reasons: (Emphasis not added)
The nondisclosure aspect is really what caused a media frenzy and, particularly, the notion that Pinterest was being deceptive with its monetization strategy.
Do you believe Pinterest should have disclosed its use of Skimlinks to make money? What do you think?
Furthermore, the drama continued after Pinterest‘s CEO indicated that it had stopped using Skimlinks.
Although, at this time, no one from Pinterest was available to talk with us, WebProNews was able to speak with Alicia Navarro, the CEO of Skimlinks, to find out what really happened. According to her, Skimlinks is a service for publishers of all sizes that allows them to automatically turn product links or references into affiliate links.
“It’s a way for these websites to earn money through affiliate marketing without having to do all the manual effort,” she said.
Navarro added that it was a “no-brainer” for a lot of sites to include the service into their revenue strategy since Skimlinks provides analytics as well as a tremendous savings in time and effort.
While she didn’t want to “disclose confidential information” about Pinterest, Navarro did tell us that it had used Skimlinks for “many years.” She said that the companies have a “happy relationship” on both sides but did point out that Pinterest had halted their partnership not long ago.
“They paused it recently for their own reasons, partly probably because of the media storm, partly probably because they’ve raised a lot of money,” said Navarro. “They now have the luxury of being able to take the time to work out their revenue strategy.”
After all the news came out, there were rumors suggesting Pinterest‘s relationship with Skimlinks was experimental and that the startup was using this story as a cover up for some of the negative press it had received. When asked about this, Navarro said that a lot of the information released was taken out of context.
“There’s nothing as scandalous as the press… I think people just like a good story,” she said.
On the disclosure side of the issue, Navarro told us that it encourages its publishers to disclose. They also have badges available to make it an easy process. However, she doesn’t think that Pinterest did anything wrong.
Since the incident, Pinterest has added a new section on its “Help” page entitled “How does Pinterest make money?” It says:
“Right now, we are focused on growing Pinterest and making it more valuable. To fund these efforts, we have taken outside investment from entrepreneurs and venture capitalists. In the past, we’ve tested a few different approaches to making money such as affiliate links. We might also try adding advertisements, but we haven’t done this yet.
Even though making money isn’t our top priority right now, it is a long term goal. After all, we want Pinterest to be here to stay!”
Navarro did point out that, if Pinterest did decide to try ads, it would “find a way to make it look beautiful.”
Speaking of the overall incident, she said that the response Skimlinks has received has been one of support.
“People are overwhelmingly supportive of Pinterest‘s use of Skimlinks, particularly because it allowed them to make a revenue stream without at all affecting the user’s experience,” Navarro added.
In other Pinterest news, the company also recently made available a “nopin” metatag to help alleviate some of the scrutiny its received over its use of copyright material.
What will happen next with the hot new startup? Let us know what your predictions are.