Pinterest $2.5 billion valuation actually makes sense

Those who follow my cynical posts about over-inflated social site valuations know that it’s hard for me to agree with numbers. I giggled when Facebook hit $70 billion before going public at much higher. I stared in disbelief when Google offered $6 billion for Groupon then realized that I had to be in a persistent dream state when Groupon turned them down. I cringed when I heard that Digg wasn’t taking a rumored $200 million offer four years ago or the subsequent $80 million offer two years ago before selling off at $500,000 last year.

I coughed a little when Instagram sold for a billion dollars, then realized that their value was elevated by Facebook’s needs in the mobile arena. They weren’t worth that much to others such as Google or Twitter, but Facebook had a gaping hole in their mobile app strategy that Instagram may prove to fill nicely if Facebook doesn’t turn them too far towards the dark side.

This time, I’m not chuckling or even coughing. Pinerest is the first social site that received a realistic valuation in a long time. $2.5 billion is a lot of money. $200 million in funding is huge for a company so young. According to AllThingsD, it appears to be all matching up to the rumors:

Pinterest confirmed the funding and released this statement from CEO Ben Silbermann: “Our focus is on helping millions of people discover things they love and get inspiration to go do those things in their life. This investment gives us more resources to help realize that vision.”

There’s one primary reason that I like the valuation. They have money on their mind at the right levels. Facebook didn’t start acting like a profitable company until they had no choice. Groupon was too aggressive with their money handling and cost themselves credibility over it. Pinterest has been playing a level hand throughout, acknowledging the need for profits while maintaining a steady appreciation of user experience. They encourage brands to use them to make sales. This is a good position and one that is friendly to everyone involved.

Perhaps more importantly (and I hope this doesn’t sound sexist, but) their appeal to women is a huge bonus. Women are more apt to participate in financial transactions through or because of a social site. Because Pinterest is female-dominated, they are eCommerce ready.

As with any social site, there’s always a chance for a huge mistake that could send them down the MySpace road of domination to failure. Still, I’ll be watching them with a guarded optimism as they seem to making all the right moves at the right times.