Pinterest's IPO filing shows dependence on Google and Facebook
Pinterest on Friday released its prospect, and the document shows how much influence Facebook and Google hold over internet businesses.
Like many websites and apps, Pinterest allows users to log in to the service using their Facebook and Google credentials. The company relies on traffic from Google's search engine and Facebook logins, which have over 2.3 billion global monthly active users.
Any changes to these two companies may drastically affect Pinterest's own business. from Google search results, according to financial filing. This action made traffic and user growth in the following quarters, Pinterest said.
"Our ability to appeal these actions is limited and we cannot revise our search engine optimization strategies (" SEO ") to restore the loss in traffic or user growth resulting in such actions, "pinterest said in the prospect.
Facebook also affected Pinterest the following quarter when the social network made a change in its login authentication system, "which negatively impacted our user growth and engagement during that period," said Pinterest.
"If Facebook or Google quits a single login or is experiencing a bug, we may lose and not be able to restore users earlier using this feature, and the user's growth or engagement may decline," Pinterest said at filing. "Any of these events can damage our business, revenue, and financial performance."
The duopoly is reflected in the market for electronic advertising. Google and Facebook stand for a combination of 59 percent of US digital advertising companies, according to eMarketer.
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