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What interests Paypal about Pinterest and why is it willing to pay more than 40,000 million dollars for it

Paypal is studying the possibility of buying Pinterest, and would be willing to spend more than 40 billion dollars to complete the operation, according to both Bloomberg and The Wall Street Journal. A transaction that, if completed, would become the largest in the technology sector so far this year, more than doubling its immediate predecessor, Microsoft’s purchase of Nuance for nearly $ 20 billion last April.

A priori, the interest of a fintech like Paypal in a social network like Pinterest does not seem clear, and even more so if we take into account the large figures, which makes it clear that it is not a mere test to diversify the business and see how they will. A sum of more than 40 billion dollars speaks of a very serious bet – multiply by ten the largest purchase to date of the payment company-, and to understand it you have to understand the evolution of both companies.

To begin with, Pinterest, like other popular social networks, is no longer just a space in which to share publications and interact with different users, but has become a powerful showcase for e-commerce, with valuable data, metrics and spaces with which you can get many advertising benefits. In addition, it must be remembered that this social platform allows you to save, collect and group images by subject, a segmentation that can be very useful for advertisers.

With the onset of the pandemic, Pinterest experienced a boom as many merchants who were forced to close their physical businesses turned to social networks to try to boost their online channels, and this social network, like others, benefited of this digital investment. The increase in spending was such that the company has even developed new tools so that its users can buy directly on the platform.

This shift towards electronic commerce is precisely what interests Paypal, which It no longer wants to be a mere payment platform and wants to become an application that integrates several more functions, including online purchases. In fact, it had already made minor movements to this objective in recent times: in 2019 it acquired the Honey coupon extension and a few weeks ago it did the same with Paidy, specialized in digital credit for digital transactions.

And with Pinterest I would get, in addition to a platform that has already taken important steps towards the sector, a large active and engaged user bases. And, according to Bloomberg, while Paypal has about 80 million users who are active 8 or 9 times a month, Pinterest has 380 million users who use the social network 37 times a month on average and who, in addition, are very interested in the content they interact with.

Thus, the incorporation of Pinterest to Paypal would be the definitive leap towards that strong bet of the fintech to integrate electronic commerce in its application. And it is that the pioneer of online electronic payments wants a piece of the succulent cake of world ecommerce after being for years one of the main ingredients that have allowed its development, consolidation and growth.