Pinterest’s IPO filing shows how powerful Google has become
Like many websites and apps, Pinterest allows users to sign into its service using their Facebook and Google credentials. The company relies on traffic from Google’s search engine and logins from Facebook, which has over 2.3 billion global monthly active users.
Any changes made by those two companies can drastically impact Pinterest’s own business.
In the first quarter of 2018, Pinterest saw keyword landing pages get removed from Google search results, according to the financial filing. That action hurt traffic and user growth in the following quarters, Pinterest said.
“Our ability to appeal these actions is limited, and we may not be able to revise our search engine optimization (“SEO”) strategies to recover the loss in traffic or user growth resulting from such actions,” Pinterest said in the prospectus.
Facebook similarly impacted Pinterest the following quarter when the social network made a change to its login authentication system, “which negatively impacted our user growth and engagement in that period,” Pinterest said.
“If Facebook or Google discontinue single sign-on or experience an outage, then we may lose and be unable to recover users previously using this function, and our user growth or engagement could decline,” Pinterest said in its filing. “Any of these events could harm our business, revenue and financial results.”
The duopoly is reflected in the online advertising market. Google and Facebook account for a combined 59 percent of U.S. digital ad spending, according to eMarketer.