PayPal Reportedly Eyes $45B Acquisition of Pinterest

It seems that while Pinterest was hosting its second annual Creators Festival Wednesday, something much bigger was in the process of being created. Payments giant PayPal is reportedly in advanced discussions to acquire the visual search and social commerce platform. Neither company would comment on the negotiations. Ed Hammond and Liana Baker of Bloomberg were the first to report on the talks, with published reports pegging the offer at roughly $70 per share, which would value the deal at approximately $45 billion. If the transaction is finalized with those terms, it would mark the largest in the consumer internet sector over the past decade, besting Salesforce’s $27.7 billion acquisition of Slack last December and Microsoft’s takeover of LinkedIn for $26.2 billion in June 2016. Forrester vice president and research director Mike Proulx said in an email, “This is PayPal’s play to parlay into the exploding social commerce business. Every social media platform is doubling down right now on native, in-application commerce experiences, recognizing that they’re a fertile territory in the next era of digital commerce.” Pinterest’s social commerce push began in earnest with its debut of visual search tools Lens, Shop the Look and Instant Ideas in February 2017. The next big step came in October 2018, when its Buyable Pin format was replaced with Product Pins, bringing shoppers directly to checkout pages on retailers’ sites and enabling them to complete purchases in a few clicks. Other significant shopping-related updates to its platform have included: March 2019: Retailers gained the option of adding their entire catalog to the platform to create Product Pins, and shopping ads were added to Pinterest’s self-serve tool, Ads Manager.June 2019: A Shopping specialty was added to the Pinterest Partners program.June 2019: Pinterest’s visual search capabilities took a step forward with Complete the Look, allowing Pinners to understand the full scene of a Pin and gather as much information as possible about the objects displayed within that Pin.July 2019: Browsable catalogs alongside Pins debuted, as did personalized shopping ideas in users’ feed.September 2019: Pinterest debuted Shop the Look ads and revamped business profiles.January 2020: Augmented reality entered the mix with Pinterest’s rollout of Try On, enabling Pinners to virtually sample lipstick before purchasing it.March 2020: Pinterest introduced a Verified Merchant Program for retailers on its platform.April 2020: A Shop tab was added to Pinterest’s search experience.May 2020: Merchants on Pinterest that use Shopify got a dedicated app.May 2020: Pinterest debuted shopping spotlights, giving Pinners access to expert recommendations from fashion and home tastemakers and publishers.June 2020: A Shop tab was added to Lens visual search results.September 2020: Ads came to Lens, the Shop tab in search and shopping on Pins in the U.K. and U.S.October 2020: New storefront profiles were rolled out for merchants.March 2021: Pinterest introduced the Pinterest Premiere video ad solution.April 2021: The partnership between Pinterest and Shopify was extended to 27 more countries.June 2021: Pinterest extended its Verified Merchant Program to Australia, Canada, France, Germany and the U.K., and its Shop tab on profiles and product tagging were rolled out in Australia, Canada, France and Germany.July 2021: Creators gained the option of making their Idea Pins shoppable.September 2021: Pinterest added its shopping features in seven more countries.October 2021: Slideshows were added to Collections.October 2021: AR try-on capability was added to Idea Pins, and Pinterest’s product tagging tool now supports the Amazon Associates Program. Alon Leibovich, CEO of social media advertising intelligence company BrandTotal, said in an email, “A union between PayPal and Pinterest makes a lot of sense. Pinterest was an early mover in the social commerce market. A deeper integration with a payment solution like PayPal could unlock more retail revenue for both sides.” Should the deal go through, it would mark the largest ever acquisition for PayPal by far, dwarfing the $4 billion it paid for price comparison app Honey in November 2019. PayPal revealed last month that it acquired Japanese buy now, pay later platform Paidy for $2.7 billion. PayPal’s stock price has risen approximately 36% over the past 12 months, largely driven by the explosion in online shopping due to the pandemic, boosting the company’s market capitalization past $300 billion and enabling it to consider a purchase the size of the potential Pinterest acquisition. Todd Krizelman, CEO of ad sales intelligence company MediaRadar, said in an email, “Pinterest would give PayPal access to a healthy and growing digital and social advertising business. With Pinterest, PayPal would be able to add buy now, pay later options to social media and establish an almost ready-made ecommerce platform.” A potential Pinterest acquisition would also give PayPal a boost versus Shopify, a formidable competitor in its sector and currently Pinterest’s social commerce partner. Pinterest went public in April 2019 at a valuation of slightly more than $10 billion, and the company’s current market capitalization is roughly $40 billion. David Kashak, CEO of Connatix, a video platform for publishers, said in an email, “Pinterest just rolled out vertical video to compete with Snapchat and TikTok, which also opens up exciting new advertising opportunities. Buying the company would give PayPal an immediate foothold in digital ads—a market everyone wants to be in right now.”