My friend Adam Rifkin, who runs the awesome PandaWhale (where I get a ton of my news), recently wrote about the Tumblr acquisition for AllThingsD.  It’s a smart and well-reasoned essay, which is well worth reading:
http://dthin.gs/113xmz8

His basic argument is that Tumble is valuable because it is a massive interest graph:

“Tumblr is one of the most fully realized interest graphs built to date, and full of commercial potential that can be best unlocked by Yahoo. Interest graphs are more valuable insofar as they:

• Allow for the expression of extremely specific interests
• Cater to more readers than writers
• Host content that is valuable without any specific social, temporal, or platform relationship between readers and writers
• Capture intent, particularly commercial intent.

Tumblr is in an excellent position to fulfill all of these strategic
goals, and as such must be considered among the most valuable interest
graphs. If properly managed, Yahoo just made a game-changing acquisition
which was well worth the $1.1 billion in cash.”

All of this may very well be true.  But if it is, then these factors apply even more to Pinterest.

Pinterest does all of the above even better than Tumblr.  The interests expressed are even more specific with clear commercial intent.  And the crazy thing is, Pinterest has even more traffic to monetize than Tumblr:

Take a gander at Quantcast’s rankings:
http://bit.ly/11ppl9o

Pinterest ranks #7 overall, with roughly 77 million monthly visitors.  Tumblr is #24, with roughly 44 million monthly visitors.

Let’s say that Pinterest visitors are 10X as valuable as Tumblr users (sorry, FuckYeahRyanGosling, I don’t think you’re going to be able to monetize as well as Pinterest boards).  If we gross up the $1.1 billion to account for that 10X value and the greater traffic, we end up with a value of about $19 billion.

If Tumblr is fairly priced, the $2.5 billion valuation for Pinterest earlier this year now looks like a steal.