The latest Silicon Valley company to file for an initial public offering is Pinterest, the San Francisco-based social network and image board that in recent years has built a large advertising and commerce business from its growing user base. The company, although it is still not profitable, says it earned more than $750 million in revenue last year, and it’s cut its losses from nearly $200 million in 2016 down to just under $75 million annually. Pinterest says it was in fact profitable in the fourth quarter of 2018, but not profitable enough to get out of the red for the full calendar year.

The company, headed up by original co-founder and CEO Ben Silbermann, plans to go public on the New York Stock Exchange. It joins ride-hailing giants Uber and Lyft, on-demand delivery company Postmates, workplace communications platform Slack, and hotel and short-term home rental service Airbnb as one of the handful of Silicon Valley companies said to be planning an IPO this year (or next). Such an influx of money could drastically shake up the Bay Area landscape by creating waves of new millionaires, a capital injection that could reshape San Francisco and, as a result, the tech industry itself due to the ripple effects it could have on new startups and investments.

Pinterest, which launched in 2010, primarily makes money by attracting advertisers to its platform, where users create boards in which they self-identify their interests and through which advertisers can try and sell them products. Pinterest says its more than 250 million monthly active users have created more than 4 billion boards with a cumulative 175 billion pins saved. The platform itself has processed more than 2 billion searches, many of which Pinterest attempts to process visually using machine learning-based methods like object and image recognition.

Pinterest is still not profitable, but it’s getting there

Effectively, Pinterest competes not so much with Facebook or traditional e-commerce sites like Amazon, but with search engines and search-based product advertising tools, as well as with sites that manually or algorithmically curate products against which advertisers can run ads. “We primarily compete with consumer internet companies that are either tools (search, e-commerce) or media (newsfeeds, video, social networks),” Pinterest writes in its S-1 filing.

“In this way, Pinterest is unique. Most consumer internet companies are either tools (search, ecommerce) or media (newsfeeds, video, social networks),” the company argues. “Pinterest is not a pure media channel, nor is it a pure utility. It’s a media-rich utility that satisfies both emotional and functional needs by solving a widespread consumer problem that is unaddressed by many other platforms. We call it discovery.”

Something Pinterest does NOT call itself anywhere in its IPO prospectus: a social network. Instead it’s a "productivity tool” and "media-rich utility." — Alex Heath (@alexeheath) March 22, 2019

That makes one of its primary competitors Google, but also increasingly Instagram as Facebook moves to monetize its image-sharing network as a kind of visual search engine that helps people find and purchase products based on their interests and the interests of influencers and celebrities they follow.

Pinterest outlines a number of other hurdles it faces going forward in the risk factors section of its S-1:

We are in the early stages of our monetization efforts and are still growing and scaling our revenue model. Our growth strategy depends on, among other things, attracting more advertisers (including serving more mid-market and unmanaged advertisers and expanding our sales efforts to reach advertisers in additional international markets), scaling our business with existing advertisers and expanding our advertising product offerings, such as self-serve tools. There is no assurance that this revenue model will continue to be successful or that we will generate increasing revenue.

Pinterest also say ad-blocking tools may, in the future, harm its profitability. “Existing ad blocking technologies that have not been effective on our service may become effective as we make certain product changes, and new ad blocking technologies may be developed,” the company explains.

Further complicating the matter is Pinterest’s reliance on tech’s biggest platform players. “Web and mobile browser developers, such as Apple, Microsoft, or Google, may implement changes in browser or device functionality that impair our ability to measure the effectiveness of advertising on our platform, including by limiting the use of third-party cookies or other tracking technology.” Pinterest specifically calls out changes Apple made to its Safari browser two years ago to cut down on ad tracking.

It’s not clear at the moment how much money Pinterest intends to raise, making it difficult to get a handle on the company’s prospective market capitalization. Investors have put more than $1.5 billion into the company, with its last valuation putting Pinterest at around $12 billion. According to The New York Times, Pinterest’s largest shareholders, and those that stand to benefit most from an IPO, are Bessemer Venture Partners, FirstMark Capital, Andreessen Horowitz, Fidelity Investments, and Valiant Capital Management.