Tag Archives: Facebook

Pennsylvania Fearmongers Attack Crowdfunding.

Hopping Mad as Commissioners Go Over the Line.

This is a re-post by David Drake of LDJ Capital & The Soho Loft.

A shocking press release hit the net last week, purportedly from the Pennsylvania Securities Commission. The link to the “advisory” goes to http://www.psc.state.pa.us, but that site doesn’t seem to host a copy. Even so, if the press release is accurate, it amounts to an unfair characterization of the JOBS Act and new Crowdfunding regulations.

Crowdfunding under the Act is portrayed as creating a Wild West style free-for-all that will attract fraud and con artists of all stripes. They cite the current lack of hard and fast rules to govern the sector and then assume no rules will be in place before next year’s launch. That’s nuts.

Here’s a typical quote:

Commissioner Steven Irwin summarized, “The way the new law was written, it’s pretty much ‘Buyer beware.'” He added, “It’s not that we don’t need new incentives to attract more investments in startup companies. It’s just that the lax oversight implicit in the new law is likely to attract people trying to game the system and scam people out of their hard-earned money.”

Excuse me?  RocketHub has had zero fraud incidents since launch in 2009. 

The plain fact is that we do need a new structure to help start-ups. Crowdfunding and micro-financing is an ideal way for new investors to participate and energize our sluggish economy. Small entrepreneurs find themselves shut out of the game. A game that already has its critics.

Take a look at the analysis of VC opportunities as they exist now – you have the WSJ exposing a scheme where GP’s rake in the major profits while late-comers to an investment bear the burden of more risk and lower rewards.

A history of overblowing risks!

It seems the PASC takes their watchdog role very seriously. They did a similar warning back in 2010, only then it was another piece of federal legislation: PA Regulators Warn: Investor Scams, Like Flu Virus, Will Mutate to Adapt to New Federal Financial Reform Bill. Here are some of the entries on their top ten list of investment traps then: ETFs, forex, gold and precious metals, “green” investments, and oil and gas.

It seems their motto is, “panic first.” And that may be their charge. After all, as a state run commission, they should have one eye on regulations and another looking out for scofflaws. But this latest hit piece goes too far.

Of course there needs to be rule-making to regulate the Crowdfunding market. Everyone agrees on that.

Of course disclosure and investor protections have to be front and center.

And read what Pennsylvania Securities Commission Chairman Robert Lam had to say in their Spring Bulletin: “The Internet is a powerhouse, and maybe – just maybe – Crowdfunding will be a good thing once it matures and we have some ground rules in place.” Somehow Mr. Lam moved from cautious optimism to fear monger – while the rules are still being written at the SEC. At the risk of being repetitive – That’s nuts.

Our real concern isn’t about one small department in one state. Our concern is that this mischaracterization of Crowdfunding will catch on without those in authority positions doing their homework. Crowdfunding is worthwhile and it offers something no other framework can – access to funding for those too small to interest VC players.

Good ideas and good companies deserve a chance to present their case to the public, and the public deserves a chance to reap the rewards.

A turf war between federal and state regulators shouldn’t have the ability to libel an entire market. Should it?

One editorial comment: The very essence of crowdfunding, aka the crowd, is the built-in protector acting on behalf of all the investors, aka the crowd. The crowd will quickly, in fact virtually instantly, call out the fraudsters and the system gamers before any crowdfunded offering gets off the ground. Um, that is the whole idea behind crowds.

So, my question is, would you rather place your $100 in the hands of a Wall Street banker to invest in, I dunno, Proctor and Gamble? Or, would you rather place it in the hands of the next Facebook, with the support of 1,999 others (aka a crowd)?


Facebook’s IPO, The JOBS Act, and Why You Should Care.

This great post by my buddy, Dara Albright, founder of NowStreet LLC, really distills the essence of the JOBS act and its potential impact on fat cat investor domination of our capital markets.

I am dismayed by the number of pundits, legislators and organizations, claiming to be “small investor advocates”, who misrepresent the JOBS Act as another piece of legislation favoring the Wall Street establishment.

The truth is the JOBS Act invites competition from both smaller financial service firms and investors which will in turn de-monopolize our capital markets and take control away from the self-serving supersized financial conglomerates.

I feel compelled to set the record straight, for the people of this nation deserve to know who really has their best interests at heart.

First of all, the JOBS Act is not a bill to appease Goldman Sachs or to help the rich get richer. It is a bill that serves regular hardworking Americans who, for nearly 80 years, have not had the same investing liberties as wealthy Americans. Deemed by the Government as not sophisticated enough to understand private company investing, small retail investors have been legally prohibited from putting their money into some of today’s hottest growth companies.

Instead, they are forced to sit on the sidelines and wait until these companies complete their IPO. Unfortunately, because companies are no longer going public in the earlier stages of their growth cycle, smaller investors can do nothing but watch these companies increase in value from afar. All the while angels, VCs and accredited (aka rich) investors reap all of the appreciation during a company’s climb to the public markets. Maybe someone can explain to me the logic behind laws that permit average citizens to purchase stocks only when “sophisticated” investors are ready to dump them.

Personally, I think it is an abuse of power for Government to dictate how we deploy the money that we earned through our own labors. Unless Government gave us that money, it should not have any discretion over how we spend it. We should have the freedom to invest our money in a risky start-up or use it to buy 64 ounces of a diabetes-inducing soft drink. Hell, we should be able to burn it if we so desire. Why is it only acceptable for the Government to squander our money?

Fortunately the JOBS Act has been signed into law and will soon democratize the investing process. But for some inexplicable reason, big government enthusiasts are pointing to Facebook’s unsuccessful IPO as an excuse to disparage this legislation. This is not only dangerously irresponsible, but appallingly disingenuous. The hypocrisy is simply shameless. Case in point, I recently learned that the same organization insisting it fights for fairness in the financial system is actually campaigning to have the net worth and income minimums for accredited investors increased. This will do nothing but widen the level of inequality.

I agree that Facebook’s IPO epitomizes the great injustice in our capital markets, but more importantly, it demonstrates just how disgusted smaller investors have become with it. Facebook (NASDAQ: FB) is down nearly 30% off its IPO price of $38 mainly because smaller investors have refused to support it. The crowd is telling us loud and clear that they are no longer willing to be the “exit strategy” for the privileged. Until smaller investors are afforded equal growth opportunities, our capital markets will continue to deteriorate.

The chart below should serve as the “poster child” for investor discrimination: 

Investor Independence Day cannot come soon enough.

About NowStreet, a truly great organization with our interests at heart:

Symbolizing the capital markets of tomorrow and the hope for a more prosperous economic future, NowStreet is known in various financial circles for its commitment to repairing a damaged capital markets system with the inclusion of a private company marketplace (PCM) that encourages long-term growth investing while facilitating capital formation, small business expansion, innovation and job creation. Through its media, event production and consulting divisions, NowStreet continues to pioneer a number of cutting-edge products, services and event platforms designed to enlighten the financial and business communities and help them capitalize in a new markets paradigm. NowStreet is a leading provider of analysis and insight into the private company marketplace, including the legislation and innovation fueling it. Based on an original hypothesis that directly correlates advancements in mass communications with stock market growth, NowStreet highlights the dynamic economic impact of a purely growth marketplace rising during the most ground-breaking period of mass media and regulatory reform. For additional information, please visit http://nowstreetjournal.com.


Mad As Hell! And, See You In Court.

That didn’t take long.

Facebook Inc and Morgan Stanley, the lead underwriter of social networking company’s IPO, were sued by shareholders who claimed the defendants hid Facebook’s weakened growth forecasts ahead of its $16 billion initial public offering.

The lawsuit also names underwriters JPMorgan Chase and Goldman Sachs among others, and follows quickly on the heels of Facebook’s May 18 stock market debut, which was plagued by technical glitches.

Facebook shares fell 18.4 percent from their $38 IPO price in the first three trading days. In early afternoon trade today, Facebook shares were up 2.1 percent at $29.51.

Hey, I just lost $2 Billion. Don’t bug me with your problems!

The legal action accused the defendants, including Facebook Chief Executive Mark Zuckerberg, of concealing “a severe and pronounced reduction” in revenue growth forecasts resulting from increased use of Facebook’s app or website through mobile devices.

Facebook was also accused in the lawsuit of telling its bank underwriters to “materially lower” forecasts for the company.

“The main underwriters in the middle of the road show reduced their estimates and didn’t tell everyone,” said Samuel Rudman, a partner at Robbins Geller Rudman & Dowd, which brought the lawsuit. “I don’t think any investor in Facebook wouldn’t have wanted to know that information.”

Regulators including the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and Massachusetts Secretary of the Commonwealth William Galvin have begun looking into how the IPO was handled. The U.S. Senate Banking Committee is also reviewing the matter. Busy, busy, busy. Let no self-respecting agency appear as though they aren’t busy looking into things. Problem: Horses are already gone. 

“The SEC has since the 1990s broadly condemned the trickling out of material non-public information, which would include that savvy, well-paid analysts are lowering estimates,” said Elizabeth Nowicki, an associate professor at Tulane University Law School and a former SEC lawyer. Condemned? Or, is it actually against the law?

Syndicate banks “are on the hook in terms of liability by not making accurate, complete disclosure,” she added. “Selective disclosure of analyst outlook changes is not acceptable.” Not acceptable? Or, against the law?

Andrew Noyes, a Facebook spokesman, said: “We believe the lawsuit is without merit and will defend ourselves vigorously.”

Andrew Noyse.

Morgan Stanley had no comment. It said on Tuesday that Facebook IPO procedures complied with all applicable regulations, and were the same as in any initial offering.

The shareholders said the disclosures about Facebook’s business risks were inadequate, and that the company should have told everyone, not just “preferred” investors, that analysts knew those risks and cut their business outlooks accordingly.

Should have? Or, were they bound under the law to disclose to everyone?

 


Mad As Hell!

I have been around the technology markets for a really long time, and I have never seen this happen before:

It appears that that Facebook‘s lead underwriters, Morgan Stanley, JP Morgan, and Goldman Sachs, all cut their earnings forecasts for the company in the middle of their IPO roadshow.

Worse, if possible, is the fact that the revised earnings forecasts were only passed along to a small group of major (important) investor clients, and not made public.

This is a huge problem.

As you might imagine, the lead underwriters are the most privileged insiders on any deal that is preparing to go public, and they have the best insight into the financial data and associated facts about the health of their client’s business. The earnings forecasts are material information and are prepared by these same analysts employed by the lead underwriters, and as such, are the foundational facts upon which the investing public places their trust. If it turns out that these analysts lied and their employers endorsed these lies, then what does that mean about the system upon which tens of millions of investors have depended for accuracy and integrity?

So, now the apparent truth about Facebook’s lackluster IPO would seem to suggest that news of these estimate cuts dampened interest in the IPO among those who heard about them. (Reuters reported exactly this—that some institutions were “freaked out” by the estimate cuts, as anyone would have been.)

During the road show that was selling (sorry, that’s what it is) the Facebook IPO, investors who didn’t hear about these estimate cuts were placed at a serious and critical information disadvantage. What they didn’t know cost them hundreds of millions of dollars.

Yes. This is a direct violation of securities laws. Privileged information selectively disseminated is a major league no-no. I assume the SEC is on this like, well you know.

What might have actually happened?

One possibility is that the underwriter analysts cut their estimates after a late amendment filing to Facebook’s IPO prospectus, in which a vaguely worded mention that indicated users were growing faster than revenue was a trend, and it appeared to be continuing into the company’s second quarter.

This language freaks out people who are used to reading filing documents, because it could easily have been taken to mean that Facebook’s revenue in the second quarter wasn’t coming in as strong as Facebook had hoped (why else would the language have suddenly been added at the 11th hour?)

Another possibility is that Facebook told the underwriters to cut their estimates—either by directly telling them to, or, more likely, by “suggesting” that the analysts might want to revisit their estimates in light of the new disclosures in the prospectus.

If there was any communication at all between Facebook and its underwriters regarding the analysts’ estimates, Facebook will have to answer for this.

Based on the actual language, it seems highly unlikely to me it would have prompted all three underwriter analysts to immediately cut estimates without some sort of nod and wink from someone who knew how Facebook’s second quarter was progressing. (To get this message from the language, you really have to read between the lines).

At the end of the day, privileged information was known to the lead underwriters and only disclosed to a few, important clients. As a direct result, Facebook’s IPO performed poorly and a lot of investors lost a lot of money, including Mark Zuckerberg, who is $2 Billion lighter today. This practice should be against the law and the lead underwriters should be severely punished. The SEC must regain control of this process and enforce strict oversight rules. The investment community should be outraged. Mary Schapiro should be fired!

Yes, Mary, it’s THAT big.

We’ll soon see how the SEC reacts, and what Congress has to say about all this. Maybe we’ll finally get to see who on Wall Street owns whom in Washington, and what the American people are actually made of.


The Wrong Day to Quit Sniffing Glue or to Make Your IPO Debut.

And now, with permission from my buddy Dara Albright, Founder of NowStreet Journal, we have her insight to the FB IPO:

Some call it a cultural phenomenon. Others label it a colossal waste of time. No matter the sentiment, all attention was on Facebook’s IPO entrance on Friday. Well, except for NASDAQ, who was too focused on repairing its malfunctioning technology, oh, and the European Union, who was busy worrying about its looming financial collapse.

Instead of skyrocketing, as was widely predicted among analysts on the Street, Facebook closed up a mere $0.23 cents, not even gaining 1%. News circulated during the day that even Facebook’s bankers had to jump in and support the stock from breaking its offering price. A far cry from LinkedIn’s IPO entrance, almost exactly one year ago, which nearly tripled its offering price during its first trading day.

The most anticipated IPO of the decade and largest technology offering in history had a less than stellar IPO debut. Yikes. What does this say about America’s capital markets? What does this mean for its economic future?

If we’ve learned anything today, it’s that timing is everything and no one, not even Wall Street’s finest, can predict the ideal day to go public. Sometimes you just “pick the wrong day to quit amphetamines”. But, bankers can sometimes price an offering correctly. And this was one of those times. Had Facebook’s stock price shot through the roof, Friday’s headlines would have read something like, “Once Again Wall Street Bankers Underprice a Deal & Screw the Issuer”.

Facebook’s underwriters should be commended. But I do not want to give them too much praise for fear it will go to their heads and result in the creation of yet another destructive derivatives product. “There’s no reason to become alarmed, and we hope you’ll enjoy the rest of your flight. By the way, is there anyone on board who knows how to fly a plane?” Sorry, once you start quoting the movie, “Airplane”, it is almost impossible to stop.

Facebook’s lackluster IPO performance also affirmed what we all know but most don’t like to confront – the public markets are significantly broken. It is challenging for companies to thrive in a trader-centric marketplace where fundamentals are rendered practically meaningless and company stock prices are at the mercy of extraneous events. Last week, Europe sneezed and Facebook caught the flu.

Unfortunately for Facebook, not too many traders came to the realization that Europe’s bleak financial future and rising unemployment actually benefit Facebook’s business. Look how many more jobless people will now have time for Facebooking. Does anyone see the irony here?

Facebook, say goodbye to the autonomy of the private markets. Now, instead of being valued on your own merits, you’ll be assessed based on the accomplishments and failures of those who have nothing to do with you, subject to the second-by-second mood swings of those judging you. Welcome to public market hell where you will now be viewed as a ticker symbol as opposed to the global innovator you are.

Don’t worry, “FB”, many considered the IPO of “GOOG” to have been a great disappointment too. Contrary to “GOOG”, at least you were not forced to slash the price and size of your offering. And remember Webvan’s hot IPO? Its stock price more than doubled during its first trading day. Perspective.

So just where was Facebook’s aftermarket love on Friday? This leads me to the final and most important lesson of the day. Even the most grandiose of companies have trouble thriving in a marketplace that lacks the aftermarket support derived from long-term investors who are more interested in funding companies rather than trading tickers. These long-term investors are a company’s clients, its customers, its users, its partners and its supporters. In Facebook’s case, they are the 900 million across the globe sharing updates, photos and videos every day. If each user bought just one share of FB, it would equate to $34.2 billion in pent up demand.

I don’t doubt that Facebook will ultimately achieve success in the public markets. It is one of maybe a handful of companies on the planet, including AAPL and GOOG, who can provide its own aftermarket support by harnessing the crowd. According to Gene Massey, CEO of MediaShares and leading expert in Direct Registration methods, “Once Facebook has been public for 12 months, it can offer a direct stock purchase option to its massive user base. By doing so, it will not only gain stock support, but Facebook will also add valuable shareholder demographics to its existing database enabling it to become the world’s most powerful marketing and fulfillment company in history.”

Unfortunately, the vast majority of companies entering the treacherous public markets do not have a support group of 900 million. Unless something is done to fix the aftermarket deficit, more and more publicly traded companies will find themselves dying a slow painful death. This will only result in additional long-term investors fleeing the public markets in search of greater stock appreciation.

The fact is the mass exodus has already begun. The fastest growing companies no longer reside on NASDAQ. They are found in the rapidly expanding marketplace for private company stock (PCM).

Facebook has inspired a new generation of social businesses poised to capitalize off its extraordinary media platform. Many of these micro and small cap companies are already enjoying spectacular revenue growth. Historically, most of these companies would have been public at this point in their life cycle, creating wealth for public market investors. However, it makes no fiscal sense for these companies to be public today.

These private companies are all thriving, in part, because their investors consist of long-term shareholders who believe in their products, their businesses and their visions. Don’t all companies deserve the right to attract investors whose interests are more aligned with their own? Shouldn’t all investors have the opportunity to invest prior to a company’s greatest growth spurt? Shouldn’t all investors have the freedom to invest their own money as they see fit?

224 days, 16 hours, 38 minutes, 16 seconds until the democratization of the US capital markets.


Startup University.

So, while reading all of the doom and gloom over the mounting student loan debt, it occurred to me that maybe we are on the wrong track entirely.

Maybe we have dug so deeply into this mental trench of “higher education” that no one has stopped to think for decades that there might be another model. I don’t mean two year industrial education or skill programs, where we turn out machinists or bartenders or hotel managers, but an entirely new way to look at education.

What if instead of the $25,500 (average reported student loan debt in 2011) and the estimated $60,000 in expenses, we substituted an entrepreneurial educational program that begins in high school instead? Not for everybody, but for those who think they might have an interesting idea and who aren’t interested in the conventional college student track.

Here’s how one would work and how it might make much more sense than what we have now. Public high schools would implement an elective  program in the sophomore year that would trace the history of entrepreneurship in this country. Maybe it supplants American History for that year. Much more interesting and relevant anyway.

Juniors and seniors would be able to choose an entrepreneurial curriculum instead of American History, Industrial Technology, Math, Language or Art. I mean, have you ever learned anything useful or relevant in history, math, language or art? Courses would concentrate on topics like starting a business 101, investment and funding, marketing, consumer behavior, general accounting, equity, sales, law and economics. Lecturers could be successful entrepreneurs from the world of high technology and consumer marketing. In addition, students would begin lab projects in their junior year, focused on creating the infrastructure for their future businesses. Upon graduation, students could elect to go on to a traditional four-year college or university or opt instead to enter a startup university. They would be encouraged to take their projects with them. Where else does that happen?

The startup university could be a joint venture between our Federal government, which could divert the funds it spends on educational subsidies ($30B), the leading venture capital funds who would invest a small percentage of their new funds, and the top universities in every major city that together, could create an open-ended program that would serve as an incubator for these entrepreneurs and their start-ups. Then, high school graduates who are ready to pursue their dreams of creating their own businesses, while skipping those years of dubious value that they would otherwise spend in college, could get right down to the business of business without any student loan burden or the distractions of college campuses. Because the program would be open-ended, it would self-select winners and losers, just the way the markets do in real life. No degrees. Just startups. Like, I don’t know, one of these guys:

The experience, connections and exposures would be invaluable. The VCs and perhaps the universities would take small seed-round positions in each startup and A round stock would be available to everyone involved, including teachers, mentors, VCs, universities and incubation administrators. Students who fail in their initial attempt would be well-positioned to try again. These kids won’t need jobs.

I am sure this notion is too radical for entrenched educators and politicians to even acknowledge as a possibility, but then what does that say about our educators and politicians? Too risky. Too controversial. Too much investment at stake.  Too radical. Things are fine the way they are. The system is working. Really?

Let’s just say we get this done. Imagine the innovation that would come rolling out of high schools, and a couple of years later. Who invented Instagram? Facebook? Google? Apple? Microsoft? All in their 20’s. All in college. How many jobs? How many countries? How much impact in the world? Facebook would be the third largest country were it a country. 

Think about the simplicity of business models like Pinterest or Instagram. Instagram, a simple mobile app for photo sharing with Twitter-like friends. OK. You can apply 17 filters to enhance the cool-factor of the photo, but so what? A $1B acquisition one year after launch?  15 million subscribers? Pinterest. An online scrapbook for other people’s content? 20 million subscribers? Why would anyone want to go to college?

Upside: Jobs. Education tied directly to student’s goals. No debt. No endless credit, housing or debt bubbles. Banks no longer in control. Innovation. Entrepreneurship. Returning America to the ideals of global leadership, economic growth, individual freedom and the pursuit of wealth and happiness.

Downside: NONE.


How To Reach Me.

You can always follow me on Twitter @sking1145 or e-mail me at: sking1145@yahoo.com or on Facebook at iSellerFINANCE. 


Ch-Ch-Ch-Ch-Changes!

And these children that you spit on

As they try to change their worlds

Are immune to your consultations

They’re quite aware of what they’re going through

Nude Calendar Protests Muslim Oppression of Women

The word revolutionary is likely to bring to mind faded khakis, bandanas — just about anything, in fact. But, a woman in the buff? But, Aliaa Magdy Elmahdy, a young Egyptian student and activist, really did spark a small revolution in October when she posted a nude photo of herself (along with several artistic nudes) on her blog, and tweeted about the post using the hashtag #NudePhotoRevolutionary. Soon others were following suit, using the hashtag to announce their own nudity, in a show of support for a very brave woman in a historically uncompromising Middle Eastern country.

The original post is here (warning: definitely not safe for work). In that post, Elmahdy wrote the following; dare I call it a manifesto?

Put on trial the artists’ models who posed nude for art schools until the early 70s, hide the art books and destroy the nude statues of antiquity, then undress and stand before a mirror and burn your bodies that you despise to forever rid yourselves of your sexual hangups before you direct your humiliation and chauvinism and dare to try to deny me my freedom of expression.

The message was written in Arabic and then in English, like most of her posts. After a few months of Twitter activity on the #NudePhotoRevolutionary hashtag, the movement has coalesced into a calendar. Maryam Namazie, whom I believe is an Iranian immigrant to Britain, and another outspoken advocate of women’s rights in Muslim countries (especially those practicing Sharia Law), put it all together. She describes the calendar and its goals here (warning: mildly unsafe for work), where she also includes links to donate or download the calendar (neither of which action requires the other).

Namazie says: ‘What with Islamism and the religious right being obsessed with women’s bodies and demanding that we be veiled, bound, and gagged, nudity breaks taboos and is an important form of resistance.’

The calendar is designed by SlutWalk Co-founder Toronto, Sonya JF Barnett who says: ‘I felt that women needed to stand in solidarity with Aliaa. It takes a lot of guts to do what she did, and the backlash is always expected and can be quite hurtful. She needed to know that there are others like her, willing to push the envelope to express outrage.’

Both Elmahdy and the movement she started have provoked outrage amongst Egyptian officials, not to mention elsewhere in the Middle East. Asserting the right not to be censored was important enough for some of these women to risk definite social – and possible political – pushback.

One might well ask, how does getting naked empower women? In the West, isn’t it quite the opposite? That may well be, but neither nudity nor modesty is automatically exploitational. It’s the idea of having the decision of how women may behave, dress, or express themselves taken away by men. Reasserting this right is, I think, the point. Thus, the reason the calendar was released on Thursday, March 8th, which is International Women’s Day. Maybe we should send a copy along with a vaginal probe to Bob McDonnell in Virginia.

Proceeds from the calendar go towards women’s right and freedom of expression.


Pinsanity: How Sports Teams Are Winning on Pinterest.

Quickly shooting up the social media pyramid, image sharing network Pinterest has gained a reputation for largely being a repository for photos of wedding dresses and floral arrangements, due to its huge female user base.

But a budding trend shows that sports teams are hopping aboard the Pinterest bandwagon. Many marketing managers  say the network offers new ways to connect with and reward fans and provide different social opportunities. And they insist that Pinterest is not just a flash in the sports marketing pan.

“With all the indicators in terms of buzz, I have a hard time believing it won’testablish itself as a major player,” says Peter Stringer, the Boston Celtics’ director of interactive media.

Like most teams, the Celtics are very new to Pinterest, joining just in the past few weeks. A handful of other NBA teams have joined, too, along with some NFL and NHL franchises and a few college and women’s sports teams. More than 20 Major League Baseball teams have joined, although only a couple have active accounts. The Celtics have the largest follower count so far, with over 1,000.

Teams use Pinterest to showcase content from fans, display merchandise, create boards of photos from the past and present, and reflect team-associated culture and lifestyle trends. However, each team we spoke with is still considering the site’s female-centric audience.

“What intrigued us initially was that the platform seemed to be dominated by women. We certainly thought it was a great way to engage with that demographic and offer a different type of content than can be found on Facebook, Twitter, and Google+,” wrote Nilay Shah, director of digital media for the New York Giants, in an email.

Several teams feature boards solely to display women’s apparel or team-themed recipes, but Shah and others said they see Pinterest as more than just a tool for reaching female fans. “We’re looking at it as if it’s predominantly for women, but we’re not treating it as if it’s only for women,” says Stringer.

The Giants have a section dedicated to their supporters’ hearty tailgating culture. The Portland Trail Blazers have boards that collect team-themed wallpapers and photos of pets in Blazers gear. Most teams have boards displaying memorabilia and clothing for sale elsewhere online.

Because Pinterest isn’t a dialogue-heavy network and allows users to follow either a brand as a whole or just specific boards, teams are able to focus on particular niches of fandom. They’re also able to share things that wouldn’t be as feasible on Facebook or Twitter.

Pittsburgh Penguins

Melissa Marchionna, new media coordinator for the NHL’s Pittsburgh Penguins, said constantly tweeting or sharing fan artwork on Facebook would likely become annoying to users. But a Pinterest board dedicated to Pens-inspired paintings and drawings, she said, “is a great opportunity to give back to our passionate, talented fans and showcase their work.”

In college sports, the University of Washington uses Pinterest to flaunt what it offers prospective student athletes. Boards called “Best 4 Years of Your Life” and “Seatown Swag” show off student culture and the university’s prime location. Assistant athletic director Carter Henderson said the school created those boards in part because they noticed that collections themed around travel destinations were already popular on the network.

Expect Pinterest’s influence to continue growing. Multiple team representatives say they plan to promote their boards more on official websites and other networks as soon as this weekend. A Golden State Warriors representative says that the franchise is investigating Pinterest strategies in anticipation of joining. Similar scenes are likely playing out in the marketing offices of several different leagues.

Dan Harbison, who directs interactive media and marketing for the Trail Blazers says he’s reminded of a different social network that is now ubiquitous in the sports world. “In ’07 we were the first team to get on Twitter, and this feels similar to that,” he says. “Success on Twitter didn’t happen for about two years — follower counts weren’t in the tens of thousands at all until then. We’re stil in the very baby stages of Pinterest, but I definitely see it being a different network than can gain some pretty good steam in sports.”


Pinterest Becomes Top Traffic Driver for Women’s Magazines.

In just a few short months!

Pinterest hasn’t just become a significant source of referral traffic for retailers; it’s also becoming a top traffic driver for women’s lifestyle, home decor and cooking magazines, some of which are seeing bigger referral numbers from the image-collecting service than from major portals like Facebook andYahoo.

Beginning this summer, Pinterest became the top social referrer for marthastewartweddings.com andmarthastewart.com, sending more traffic to both properties than Facebook and Twitter combined. Pinterest is on track to become the second highest traffic driver (after Google) to Cooking Light‘s website, up 6,000% from just six months ago. The social bookmarking site already drives three times the amount of traffic to Cooking Light compared to Facebook.

Elsewhere, Pinterest is the fourth largest source of traffic for Country Living, up 150% from August to the end of January, and accounts for 3% of all referrals. It was the ninth largest traffic source for both Elle Decor andHouse Beautiful last month, both of which have seen triple-digit percentage increases in referrals over the last six months, and was among the top 10 referral sites for Self magazine.

In most cases, the traffic began organically. Style, home decor, weddings and food are among the most popular pinning categories among the site’s more than 10 million registered users, the majority of whom are women. Pinterest users turned to the websites of lifestyle magazines early on for material, and many publishers moved quickly to harness Pinterest’s potential as a traffic driver by creating their own branded accounts.


Multiple editors contribute to Country Living’s Pinterest page.

Instead of assigning the account to a community or social media manager, Country Living has divvied up its boards among editors. The crafts editor, for instance, posts to the crafts board; the photo editor posts to aboard of inspiring images; and three market editors manage the shoppingstyle, and Etsy boards. An editors’ faves board contains repins from staffers’ personal boards. Much of the content is derived from Country Living‘s own evergreen and season-specific material, but content is also pinned and repinned from favorite bloggers, designers, stylemakers and photographers, Allison Mezzafonte, director of Hearst Digital Media’s Shelter Network, tells us.

“Creating Pinterest pages [for our magazines] allows us to share what we see around the web, and not just our own content. [Our audience] wants to know what we see, what we like, and what’s inspiring us beyond the beautiful images seen in the pages of our magazines,” Mezzafonte explains.

To build awareness of Country Living‘s Pinterest presence, the magazine also cross-posts some of its pins to Facebook and Twitter. Mezzafonte also monitors Country Living’s source page to track, Like and comment on what is being pinned from the site. “I think it makes [users] happy to know that we’re paying attention to what they’re pinning and what they like,” Mezzafonte says. “It’s also a very visual way for me, as the web editor, to see what people are looking at on our site… [To see] the images, projects and recipes that resonate most with our readers.”

It’s not just legacy print publications that are reaping the Pinterest boom, however. Pinterest recently passed Yahoo to become the number-four referral source to MyRecipes.com, accounting for roughly 6% of traffic in January. Referrals are up 246% from October, and up a whopping 2500% from July. A spokesperson for the MyRecipes.com noted that the site has its own frequently updated brand pages, but that the majority of the traffic is coming from users who pin recipes directly from the sites, and from the viral activity that happens organically on Pinterest.


Martha Stewart Weddings has added pin buttons to its site.

In some cases, publishers are also adding pin buttons to their sites, reminding readers to save their content to Pinterest. Martha Stewart Weddings recently added a pin button to its social toolbar, in between the Facebook Like and Google +1 buttons.

While publishers and retailers are both reaping the rewards of traffic increases, it’s still not clear whether they’ll be able to monetize that traffic further. Can magazines turn Pinterest referrals into subscribers? Can retailers turn Pinterest users into customers? The platform certainly has the potential to do both, meaning that the network could become even more central to their marketing efforts than it is at present. I think the better question should be, “Can the magazines and retailers reinvent themselves to capture this traffic, and forget about monetizing it until they have loyal followers?” That’s the way the social web has always worked.


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