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PERPLEXITY AI
A former OpenAI research intern decided the best way to use AI wasn't chatbots — it was fixing search. Aravind…
Ben Silbermann built a virtual pinboard for collecting pretty pictures and accidentally created one of the mos…
AT A GLANCE
FUNDING HISTORY
Perplexity AI
BUSINESS MODEL
Perplexity AI
Perplexity uses a freemium model. The free tier gives unlimited basic searches powered by a standard model.
Perplexity Pro costs $20/month and gives access to more powerful frontier models from OpenAI, Anthropic and Google, alongside Perplexity's own, unlimited Pro searches, file uploads, and image generation. Perplexity Enterprise Pro is designed for businesses with team management and API access.
The company also recently introduced advertising through "sponsored follow-up questions" — a controversial move that some see as inevitable and others see as the beginning of the end for ad-free search.
Pinterest makes money through advertising — specifically through "Promoted Pins" that look nearly identical to organic content. This is the magic of Pinterest's business model: ads don't interrupt the experience because the experience IS discovering products and ideas.
A promoted pin for a kitchen knife set appears right alongside organic pins of kitchen designs. The user doesn't distinguish between "ad" and "content" because both serve the same purpose.
Shopping ads are the fastest-growing segment. Brands upload their product catalogs, Pinterest matches products to user searches and boards, and users can buy directly through the platform or click through to the retailer's site.
Pinterest gets paid per click or per thousand impressions.
Revenue reached $3.65 billion in 2024, up from $3.05 billion the year before, and 2024 was its first genuinely profitable year. Average revenue per user is growing but still well below Meta's — the upside is enormous if Pinterest can close that gap.
HOW THEY STARTED
Perplexity AI
Aravind Srinivas grew up in Chennai, India, got a PhD in AI from UC Berkeley, and worked as a research intern at OpenAI and a researcher at DeepMind. He watched the ChatGPT explosion in late 2022 and saw something everyone else missed: AI chatbots were interesting, but AI-powered search was potentially more valuable.
Google search hadn't fundamentally changed since 1998. It still showed you a list of links and made you do the work of reading and synthesizing information.
Srinivas co-founded Perplexity AI in August 2022 with Denis Yarats (ex-Meta AI), Johnny Ho (ex-Quora), and Andy Konwinski (co-creator of Apache Spark). Their idea was an "answer engine" — you ask a question, Perplexity searches the internet in real time, reads the sources, and gives you a synthesized answer with inline citations.
No ads. No SEO spam.
Just answers.
The product launched quietly and grew through word of mouth among researchers, developers, and knowledge workers who were frustrated with Google's increasingly ad-cluttered, SEO-gamed results. Within a year, Perplexity was handling millions of queries daily.
Ben Silbermann was a former Google ad operations employee who quit in 2008 to build apps. His first attempt was an iPhone app called Tote — essentially a mobile catalog that let women browse and bookmark products from fashion retailers.
Nobody downloaded it. But Silbermann noticed something in the data: users were saving products obsessively.
The collecting behavior was more interesting than the shopping behavior.
He teamed up with Paul Sciarra, a classmate from Yale, and Evan Sharp, a designer who was studying architecture at Columbia. Together they built Pinterest — a visual bookmarking tool that let people "pin" images from around the internet to organized boards.
Think of it as a digital mood board that anyone could make.
Pinterest launched as an invite-only beta in March 2010. Growth was painfully slow at first.
Silbermann personally wrote to the first 5,000 users, giving them his phone number and asking what they wanted. The early community was overwhelmingly women interested in home decor, fashion, recipes, and DIY projects.
By 2011, Time magazine named Pinterest one of the 50 best websites. By 2012, it was the fastest site in history to reach 10 million unique monthly visitors.
HOW THEY GREW
Perplexity AI
Perplexity grew almost entirely through product quality and word of mouth. The first users were AI researchers and tech workers who shared it on Twitter.
Every time someone used Perplexity and got a better answer than Google, they posted about it. The product was its own marketing.
The mobile app was a growth accelerator. By launching on iOS and Android early, Perplexity captured users who wanted quick answers on their phones.
The app was faster than opening a browser and Googling — one tap, ask your question, get an answer. Mobile usage now exceeds desktop.
Strategic distribution deals expanded reach. Perplexity partnered with SoftBank (default AI assistant on SoftBank phones in Japan), Deutsche Telekom, and various hardware manufacturers to be pre-installed as the default search assistant.
These deals put Perplexity in front of millions of users who had never heard of it.
Pinterest grew organically through women sharing boards with each other. The weddings use case was the killer app — brides-to-be would create boards for dresses, venues, flowers, and invitations, then share them with their wedding parties.
That viral loop drove millions of signups.
SEO is the secret weapon. Pinterest pages rank extremely well in Google Image Search.
Someone searching "modern living room ideas" often sees Pinterest results on page one. That drives a large stream of organic traffic from people who were not looking for Pinterest at all.
Unlike other social platforms, which compete with Google for attention, Pinterest quietly benefits from it.
The shopping pivot has been the growth unlock. Under CEO Bill Ready (former Google and PayPal executive who took over in 2022), Pinterest aggressively invested in shopping features — catalog integrations, buyable pins, merchant verification, and visual search for products.
The thesis: Pinterest users are already in a shopping mindset, so removing friction between "I like this" and "I bought this" is the straightforward path to revenue growth.
THE HARD PART
Perplexity AI
Google is the elephant in the room. Google controls 90%+ of the search market and generates $175 billion annually from search advertising.
Google has responded to Perplexity by adding AI Overviews to search results — essentially copying the answer engine concept. Google has unlimited data, unlimited compute, and the default position on every browser and phone.
Competing with Google for search is historically a death sentence.
The publisher problem is real and litigious. Perplexity synthesizes content from news articles and websites without driving traffic back to those publishers.
Multiple media companies have accused Perplexity of scraping their content and delivering it as answers, depriving them of page views and ad revenue. The New York Times, Forbes, and Condé Nast have all raised concerns.
If publishers successfully block Perplexity or win legal challenges, the product's utility decreases.
Monetization without ads is nearly impossible at scale. Perplexity initially positioned itself as the ad-free alternative to Google.
But $20/month subscriptions can't fund the compute costs of an answer engine serving hundreds of millions of queries. The introduction of sponsored questions signals that pure subscription revenue isn't enough.
Whether Perplexity can add ads without becoming what it set out to replace is the defining question.
Pinterest's demographics are both an advantage and a limitation. The platform skews heavily female (over 60% women) and is strongest in home, fashion, food, and weddings.
Expanding beyond these categories to attract male users, younger demographics, and different use cases has been slow.
Competition for ad dollars is fierce. Pinterest competes with Meta, Google, TikTok, and Amazon for advertising budgets.
Most advertisers allocate the bulk of their spend to Meta and Google first, then consider others. Pinterest needs to prove its return on ad spend is competitive to win larger budget allocations.
Creator economy is underdeveloped. While Instagram, TikTok, and YouTube have massive creator ecosystems with monetization tools, Pinterest has historically been about content discovery, not content creation.
Users pin other people's content — the original creators often don't even know their work is on Pinterest. Building a creator program and driving original content creation on the platform has been a recent focus but lags far behind competitors.
THE PRODUCTS
Perplexity AI
Perplexity Search is the core — ask any question and get an AI-synthesized answer with cited sources. Pro Search performs multi-step research, asking clarifying questions and digging deeper for complex queries.
Perplexity Pages lets users create shareable research articles from their queries. Collections organize saved searches and threads.
The Perplexity API lets developers integrate the answer engine into their own products. Perplexity recently added Spaces for team collaboration on research projects.
Pinterest Home Feed — the core discovery surface showing personalized pins based on user interests, boards, and search history. Pinterest Lens — visual search technology that lets users take a photo of any object and find similar items to buy on Pinterest.
Pinterest Shopping — integrated e-commerce allowing users to browse and purchase products directly from pins linked to retailer catalogs. Pinterest Boards — the organizing system where users save and categorize pins into collections, used for wedding planning, home renovation, recipes, fashion, and more.
Pinterest Shuffles — a collage-making app for Gen Z users to create aesthetic mood boards, driving younger user adoption.
WHO BACKED THEM
Perplexity AI
Jeff Bezos, IVP, NEA, Databricks Ventures, Nvidia, SoftBank
Bessemer Venture Partners, FirstMark Capital, and Andreessen Horowitz were early investors. Fidelity and Valiant Capital participated in later rounds.
Rakuten invested strategically. The April 2019 IPO raised $1.4 billion at a $12.7 billion valuation.
Elliott Management, the activist investor, took a large stake in 2022 and pushed for operational improvements that contributed to the company's path to profitability.