About That Pinterest Scandal: Nobody Thought There Was Anything Wrong With Skimlinks When It Raised $4.5 M. Last Fall

Why is anyone getting their pins in a knot?

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Ms. Navarro.

Pinterest is making money with affiliate links, something the average Pinterest user cares about approximately not at all, and it’s caused a small kerfuffle. Pinterest is using Skimlinks, a London-based third-party service that scans links and checks to see if the destination (most relevantly, sites like Etsy and Amazon) has an affiliate program that pays kickbacks for referrals, as explained by Pinterest pundit Josh Davis in a post that questioned the ethical implications of using the service without disclosing that fact to users.

But as Skimlinks CEO Alicia Navarro points out in a response on the Skimlinks blog, and as many comments on the story pointed out, the nondisclosure is practically a nonissue. Pinterest has broad language in its Terms of Service that allows it to exploit and monetize user content, as do most free social networks. If a users want to personally reap the gain from the traffic they drive, instead of handing it over to Pinterest, they can submit their own affiliate links; Pinterest won’t mess with those. 

Further, there were no questions about ethics or disclosures when Skimlinks raised $4.5 million a few months ago with total transparency about its business model. “It’s not a secret. We do monetize social discovery, and it’s great,” Ms. Navarro titled her response to the Pinterest story.

And they’re not the only company that does this. “In the same ballpark as Vibrant Media, [Skimlinks] converts product-related text in web pages in to hyperlinks with affiliate links, so that publishers benefit from users’ outbound visits to merchants’ sites,” wrote PaidContent when Skimlinks announced its raise.

Skimlinks and its ilk could be analogized to Google’s Adsense network, which rotates in advertisements based on the content publishers are already putting on their sites. You could optimize your content for AdSense—many spammy entrepreneurs do—but most people just set it and forget it.

Skimlinks is “hoping to revolutionize the affiliate model by turning normal product links into affiliate links,” wrote Leena Rao at TechCrunch in 2010. “Today, the startup is launching a nifty discovery tool for publishers to search for affiliate links by keyword.”

“How they are doing it with no disclosure to users feels weird,” Mr. Davis wrote about Pinterest’s use of Skimlinks. But does it? The nondisclosure of the use of affiliate links, which don’t impair the user experience or materially impact what content is shown, actually drew a number of “so whats?” The top comment on Hacker News: “I have absolutely no issues with this.” Pinterest could silence its critics with one line in an FAQ: “How do ya’ll make money?” Answer: We change the address of some links. “Oh, okay.”

On the range of crimes against users (Pinterest has 10 million of them now), this one ranks pretty low. The greatest argument against Pinterest would be that it dilutes affiliate programs, with the potential to turn every redirection into a paid referral. Cool. As long as Amazon’s paying.

About That Pinterest Scandal: Nobody Thought There Was Anything Wrong With Skimlinks When It Raised $4.5 M. Last Fall