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Pinterest Acquires Marketing Startup Kosei to Beef Up Ad Offerings

Promoted Pins are about to get a lot more accurate.

Kurt Wagner / Recode

Pinterest* is ready to start making some money.

The bookmarking and photo-sharing company announced Wednesday the acquisition of Kosei, a Palo Alto-based startup with technology for making personalized product recommendations to Internet users.

For Pinterest, Kosei’s technology should help the company improve its only ad product, Promoted Pins, which places material from paying advertisers into the feeds of users who might not otherwise see it. As with any ad offering, success depends on getting the right ad in front of the right user; Kosei specializes in doing just that.

Pinterest will use the technology to build out an “object graph” for each user, according to a company spokesperson, essentially mapping which types of products you pin, repin or like. Using that product profile, Pinterest should be able to recommend more relevant pins for users, and surface better ads, too.

It’s a relatively blatant advertising push for the company, which just expanded Promoted Pins to all U.S. advertisers for the first time earlier this month. Pinterest has billions of Pins on the platform, so if the company can identify which products users most want to see, they should be able to create a better ad experience.

Pinterest has been markedly slow to bring advertising to the platform given the demand from advertisers, particularly retailers. Pinterest’s long-term vision most likely includes some type of “buy” button, in which the average consumer will not only be able to find the perfect decoration for her living room, but will be able to purchase it as well.

That still remains a ways off, but Pinterest is preparing for the day when you visit the platform to do your actual shopping. The company rolled out an extensive search tool last April, giving users the ability to filter pins using a wide assortment of keywords. Now Pinterest is gearing up a recommendation capability as well.

Kosei’s co-founders will join Pinterest’s San Francisco headquarters, as will select members of the Kosei team. They’ll report to Pinterest’s head of engineering, Mike Lopp. A Pinterest spokesperson declined to share terms of the deal.

* Pinterest executive Joanne Bradford is an independent board member of Re/code’s parent company Revere Digital, but has no involvement in our editorial process.

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