How PayPal’s rumored interest in Pinterest connects to the social-shopping boom

DIY holiday gift inspo... Some want a hand-poured soy candle, some want a multibillion-dollar company. PayPal was reportedly in talks to buy Pinterest for a whopping $45B — a cushy premium on its $40B market cap. It would’ve been the biggest acquisition of a social-media company ever. But late on Sunday, PayPal said it was not pursuing a Pinterest acquisition “at this time.” Pinterest shares plunged on the news. At first tap, the pairing might have seemed random:

• PayPal is the $300B online payments giant, with 400M+ users. It rose to fintech fame thanks to its handy checkout button on retailers' sites.
• Pinterest, which IPO’d in 2019, is the wholesome social network where 450M people create mood boards for chateau-style weddings, man caves, and latte art.

Came for the vintage Pin-spo... left with the vintage jeans. The PayPal-Pinterest reports come at a time when product discovery and spending are shifting to social apps like Insta and TikTok. US shopping on social sites is expected to jump 36% this year, to $36B. Not coincidentally: Many Pins have "shop" buttons that connect to merchants' sites. Pinterest is where people start the shopping journey — a payments company like PayPal might be interested in finishing it.

• Buying an audience: More than half of Pinterest users are women between the ages of 24 and 49, a lucrative demo that makes the bulk of families’ spending decisions. Nearly half of Americans who make $100K+/year are Pinners.
• Social shopping: If PayPal integrated its payment system with shoppable Pins, it could boost its transaction revenue from 450M+ Pinners
• Selling #ads: Pinterest’s revenue from retailers’ “Promoted Pins” would've helped PayPal diversify its income, which mainly depends on payments volume.