Pinterest Inc. is paying up to acquire talent as it builds out an image search engine based on its users’ intent.
The image-discovery site,Pinterest,on Tuesday said it has acquired half the staff at URX, a San Francisco mobile advertising service co-founded by a former Google manager. As is the case with many of Pinterest’s purchases, this one was more about acquiring people over tech, a company spokeswoman said.
URX’s technology and assets will be shut down. But Pinterest gains URX co-founder and chief executive John Milinovich, who will join as a product manager. Before starting URX, Mr. Milinovich was at Alphabet Inc.’s Google, where he worked on the Google Analytics team and helped roll out the Google Offers coupon service.
Pinterest declined to disclose financial terms of the deal, which is its 11th acquisition. The deal was mostly comprised of stock, according to a person familiar with the deal.
The company is replenishing its talent after losing some high-profile managers in recent months, a common scenario at startups in a rapid growth phase. Most recently, Pinterest’s head of engineering Michael Lopp left the company in April after joining two years ago, according to the company spokeswoman. Mr. Lopp had previously worked at Palantir Technologies and Apple Inc.
URX—started in early 2013 by four former classmates at the University of California, Los Angeles—specializes in so-called deep links on the mobile Web. In essence, it serves ads in mobile browsers that take users to apps such as Spotify or SeatGeek where they can take actions such as listening to a song or buying tickets to a concert.
Deep linking has become increasingly important to Google,
Facebook Inc., Twitter Inc. and other Web companies as users shift to mobile devices and spend more time in apps. The technology aims to add ways to enable people to move seamlessly between specific pages in different apps.
Pinterest says it was intrigued by the URX team’s expertise in matching user intent with results as it is builds a ” discovery engine” driven by smart recommendations. For example, if a user on Pinterest starts a “board”—where people save a collection of images, or “pins”—and names it “nursery,” Pinterest would take that as a cue to surface items such as cribs and other family-friendly items.
At Pinterest, URX employees will work on search and discovery, which focuses on understanding the data behind each pin; and rich pins. Rich pins carry extra bits of information, such as the ingredients for a recipe, and aim to help people take actions such as installing an app or buying a product.
Pinterest, valued at $11 billion by investors last year, is working to turn its service into a global one as it seeks to ramp up its advertising business. The Wall Street Journal has previously reported that Pinterest made about $100 million in revenue from advertising in 2015.
URX, incorporated as AdLast Inc., had raised about $15 million in funding from investors including venture-capital firms Accel Partners and First Round Capital, and angel investors such as actress Jamie Lee Curtis and former football player Joe Montana.
Pinterest has been at a revenue and identity crossroads for some time now. As it looks to pivot from being merely a social content-sharing platform, Pinterest has made moves, such as the talent grab in the URX deal, to attract advertisers.
Last month Digiday got hold of a pitch deck Pinterest used for selling advertising where the company positioned itself as somewhere between social media and search. By purchasing a mobile ad tech firm purely for its talent, and then tasking that talent with search, Pinterest is indicating where it sees itself heading.
John Milinovich, URX’s co-founder and now-former CEO, wrote in a post on the firm’s website, “Today, I’m excited to announce that the URX team is joining Pinterest. As we learned more about Pinterest’s mission of helping people discover and do the things they love, it was clear that we share a similar view of the future. Discovery is one of the largest problems and opportunities on the web, and Pinterest is well positioned to solve it at an unprecedented scale.”
About the deal, Pinterest’s head of product Jack Chou said in a statement, “We’re focused on building useful and relevant experiences to help people discover ideas and bring those ideas to life. We can now accelerate our efforts with the URX team, who are leaders in mobile content understanding, recommendations, monetization and discovery.”
Pinterest has been actively building out its advertising business, most recently teaming up with Millward Brown to help brands measure ad impact. The URX acquisition might help position Pinterest to help improve app discovery and Pinterest’s shoppable ads — both of which would be of value to marketers.