Despite Growing Rumors, PayPal Rejects Reports Of Potential Pinterest Acquisition
In 2020, it seems like no one is impervious to rumors. The most recent round of tech gossip is about PayPal and how they were to acquire Pinterest.
Reuters and other media reported on the deal when sources said PayPal offered $70 per share, mainly in stock, for Pinterest, and there were talks to buy the social media platform for as much as $45B.
These rumors were dashed on October 25 when PayPal released a one-sentence statement: “In response to market rumors regarding a potential acquisition of Pinterest by PayPal, PayPal stated that it is not pursuing an acquisition of Pinterest at this time.”
However, what stands out is that they did not offer a hard “no” as much as a “not right now” response. Of course, any additional speculation has been quashed for now since PayPal did not provide further details on the matter.
Why The Rumor? Why Pinterest?
According to a recent New York Times article, the transaction between PayPal and Pinterest would have been among the biggest ever by PayPal since being spun off from eBay in 2015. It would have bolstered its presence in e-commerce by using Pinterest’s “buyable pins.”
Pinterest has performed well over the last year, with its revenue rising nearly 50 percent in 2020 because of the jump in online shopping, so it seemed like a reasonable rumor because PayPal was struggling with tougher competition in its core digital payments business. Of course, like many social media platforms, as the boom starts to wane, Pinterest finds itself in similar predicaments as other platforms.
As lockdowns have eased globally, Pinterest has warned about slowing user growth, especially in the United States, which accounts for a majority of its user base. Pinterest has said it expects growth mainly through deeper engagement with existing users rather than new sign-ups.
We recently reported how Pinterest is tapping into more user engagement through popular interfaces like vertical scrolling, which was made popular on TikTok, so they haven’t given up the good fight.
As for PayPal, the company could have benefitted from a merger with Pinterest because social commerce is something Pinterest has been focused on since pivoting from an image search site where users go to find style, wedding, and decor inspiration. PayPal, meanwhile, wants to build out its already extensive financial ecosystem to increase its viability in a competitive market.
Though it looks like this rumor is not going to pan out for now, it may not be entirely off the table. There seems to be a need for PayPal to expand and adapt to new demands, while Pinterest also aims to maintain some momentum after a successful 2020 and early 2021. We will keep an eye on any new rumors as they surface.
In the meantime, we offer tips on how to advertise on Pinterest and tap into that deeper user engagement Pinterest is currently nurturing.