Is Pinterest Pocketing Revenue by Tracking User-Generated Pins?




Pinterest

Popular social bookmarking site Pinterest has become the hottest startup on the web, luring millions of people to the site to collect and share things they like on the Internet.

But a new report from social media blog LLSocial reveals that the site may be “quietly” generating revenue by adjusting and tracking the links attached to pins that are posted by users.

LLSocial noted that Pinterest may be collecting money through an affiliate program when pins are connected to ecommerce sites. For example, a picture of a sweater pinned to someone’s online board might have a link that connects them to a site where the sweater can be purchased, and this is when Pinterest reportedly steps in.

“If you post a pin to Pinterest, and it links to an ecommerce site that happens to have an affiliate program, Pinterest modifies the link to add their own affiliate tracking code,” LLSocial said. “If someone clicks through the picture from Pinterest and makes a purchase, Pinterest gets paid. They don’t have any disclosure of this link modification on their site.”

LLSocial said Pinterest is reportedly doing this via a service called skimlinks, which automatically scales the site and adds affiliate links to products associated with an affiliate program. The service makes money by taking a percentage of the generated affiliated revenue.

Although adding a tracking code isn’t rare, the blogger said Pinterest isn’t informing users about the practice.

“As most bloggers are aware, when you use an affiliate link in your post, you need to provide some type of disclosure either by it clearly being an ad, mentioning it is an affiliate link or at a minimum providing some type of prominent disclosure that your site features affiliate links,” LLSocial said. “This is done because you have a financial interest is promoting the product.”

“In Pinterest’s case, since they are not creating the content and are inserting the links automatically, they might feel that they are not promoting affiliate linked pins any more than other pins, and thus they don’t need to disclose as the placement is not affected based on the financial gain,” the site continued.

Pinterest hasn’t responded to Mashable for comment.

LLSocial added that Pinterest should disclose this practice to users to maintain trust, even if they aren’t legally required to do so.

Pinterest’s popularity is undenaible. In fact, it has reportedly become the fastest standalone site ever to reach 10 million unique visitors in a month, according to comScore data via a report by TechCrunch.

Pinterest recently raked in 11.7 million unique visitors in the U.S., helped largely by adoption among 18- to 34-year-old women. Members tend to spent about an hour and a half (98 minutes) on the site each month, the report said.

Do you think Pinterest should make it more clear that they are adding tracking code to user-generated pins? Do you know of other websites that don’t disclose this type of profit-generating behavior? Let us know your thoughts in the comments.

March 2010: Pinterest Launched

Pinterest is launched to a closed beta. Later it will move to the email invite system it currently employs.

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