Status: 10/21/2021 11:26 a.m.
According to media reports, PayPal is keen to buy Pinterest and is ready to pay $ 45 billion. Why is the payment service interested in a photo platform?
The Internet payment service PayPal is to plan the largest takeover in the company’s history. As reported by the “Wall Street Journal” (WSJ) and the news agencies Reuters and Bloomberg, the purchase price could be around 45 billion dollars. PayPal offered $ 70 per Pinterest share.
People familiar with the processes are quoted as saying that PayPal wants to complete the purchase by the beginning of November. However, it is currently unclear whether a deal will be concluded, and the conditions could also change, the reports said, restrictively. For the time being, there was no comment from PayPal and Pinterest.
Pandemic winner
Both PayPal and Pinterest are considered winners of the corona pandemic. In times of exit and contact restrictions, more people were shopping online and paying more often via PayPal. More users were on Pinterest in lockdown, who were inspired there for handicraft or home improvement projects, among other things.
PayPal currently has a market capitalization of 320 billion dollars due to the boom in online shopping in the corona pandemic, the social network is currently worth around 40 billion dollars on the stock exchange. A $ 45 billion acquisition would dwarf Microsoft’s acquisition of LinkedIn. The technology giant paid a good $ 26 billion for the contact platform five years ago.
What is PayPal doing with Pinterest?
PayPal is apparently planning to combine the success of the payment service and financial services with shopping. CEO Dan Schulman recently said at an investor conference that his company was following a big roadmap around the topic of Internet shopping. He is very enthusiastic about the first results of this strategy and what is achievable. Buying Pinterest could therefore be part of the strategy.
Because Pinterest began as a place where users can save photos from the Internet on so-called pinboards on specific topics. Meanwhile, Pinterest also sees itself as a visual search engine in which software can identify similar objects. On the basis of this ability, the service now wants to play an increasingly important role in online trading. The idea is that you should be able to buy things that you see on the portal right away – and pay via PayPal.
Investors are not convinced
With the purchase of Pinterest, PayPal could also profit from the fact that more and more Internet users are buying goods that they have seen on social media sites and that have been recommended by “influencers”. A merger of the two companies could be the starting signal for further mergers of financial technology companies and social media.
The topic of e-commerce has long since become an important business area for the industry leader Facebook. The social network also wants to benefit from the huge trend with new shopping functions and thus combine the advertising business area with the shopping division. After all, the corona crisis has shown that gigantic growth rates can still be expected in online retail.
Investors either don’t seem to understand the plans, or they think the price is too high: PayPal shares reacted with significant discounts. Pinterest titles, on the other hand, shot up. However, it is noticeable that they only rose to around $ 63. That could mean that the skepticism about the possibility of the deal still prevails.