Pinterest Buys Startup Kosei to Assist in Ad Targeting

While Pinterest has been relatively mum about its 2015 plans, an acquisition made on January 21, 2015, sheds some light on the company’s agenda. Pinterest announced the purchase of Kosei, a small startup based in Palo Alto, California, which specializes in targeted ads and personalized product recommendations.

Michael Lopp, Head Engineer at Pinterest, stated that the acquisition would accelerate Pinterest’s work in “discovery and monetization,” while also highlighting the importance of machine learning when it comes to driving ads. This would mean that the current Promoted Pins would become more targeted than before, thanks to Kosei’s “unique technology stack that drives commerce by making highly personalized and powerful product recommendations.”

Lopp also elaborated on how significant machine learning is to Pinterest. Apart from accelerating ad performance, machine learning also helps in detecting spam content, object recognition, and determining search and related content. In an interview with TechCrunch shortly after the acquisition announcement, Lopp stated that the Kosei team will spend the first 90 days “figuring out where to apply themselves” in these aspects.

With Pinterest valued at $5 billion, it struck some as odd for the company to acquire a small, barely-year old startup consisting of 10 employees. Nevertheless, Pinterest seems confident that Kosei’s technology will help them beef up their target ads. According to Lopp, Kosei’s learning technology is able to map out over 400 different relationships between 30 million products.

With Pinterest’s over 70 million active users, this more than fits nicely into a social network that relies heavily on visuals.

As people use Pinterest to save and discover the things they want to do in the future, we have a unique and growing data set of more than 30 billion Pins that will only get more powerful over time. With the addition of the Kosei team, we can supercharge our existing graph to help brands reach people at the right moments, and improve content for Pinners.

Kosei is Pinterest’s sixth acquisition to date. Neither side has disclosed the terms of the deal.

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