This Is the Number to Watch at Pinterest
If you simplify a business down to its essentials, there's not much complexity. Money comes in at the top line, the costs of operating the business come out of that revenue figure, and what's left are the company's earnings on the bottom line. Social media company Pinterest (NYSE: PINS) has a unique model, but when you boil it down to the basics, it also has a potentially big problem. Here's what investors need to be watching closely today.
Pinterest is a platform where users can create online pinboards, for lack of a better term. They put up content that interests them -- largely links to photos and such that are hosted elsewhere. That, in and of itself, would not be a compelling business model since it generates no revenue. What turns Pinterest into a business is the advertising space it sells around the boards created by its users.
Image source: Getty Images.
Source Fool.com
