While buying Tumblr isn’t necessarily a bad deal for the two companies, as my colleague Mathew Ingram wrote, there’s another photo site out there that might have been an even better deal: Pinterest.

In many ways, Pinterest is also building a mobile-friendly photo site just like Tumblr, but Pinterest is also in the midst of constructing the underpinnings for a potentially much more lucrative native revenue experience. Pinterest is oriented around commerce and consumers craving particular items. That’s good for business.

No, buying Pinterest wouldn’t help Yahoo discover its inner tween. It’s a well-known fact that Pinterest is populated mainly by adult women — not exactly the demographic Yahoo needs to attract. And no, considering Pinterest’s valuation as of its last funding round, such an acquisition probably wouldn’t have come cheap. Acquiring the company would require a much bigger departure from Yahoo’s current mass-market advertising into the world of e-commerce and affliate links. It could be a harder sell to the company’s investors, and a bigger transition for everyone.

But if Yahoo is looking to shell out the big bucks for a site with viral growth, visuals to compete with Facebook, and a devoted community of users, Pinterest might have been the better choice. According to a Pew report in December, out of all online adults (which is basically anyone with an internet connection), just six percent of those people visited Tumblr on a regular basis, compared with 13 percent on Instagram (which isn’t exactly for sale), and 15 percent on Pinterest — only Twitter comes in at 16 percent ahead of the others and behind behemoth Facebook at 67 percent.

Less than a year out of beta, Pinterest is a dominant force on the web; a place where women of all ages collect photos of things that inspire them or things that they want to remember or create. For many, it’s a digital wish-list. And because of that, Pinterest sends huge amounts of traffic to online retailers. To be the intermediary between the people and the stores is a good place to be — you’re a crucial link that drives the sales, without any of the hassle of shipping or orders or user acquisitions that come with e-commerce.

Pinterest CEO Ben Silbermann at the company’s new offices in San Francisco.

Pinterest has no business model in place right now — the site is free to join and for brands to integrate with — but that’s just right now, and it likely won’t last. The company just announced yesterday that it is starting to connect photos of items back to the brands who sell them, and it’s not hard to image how this could play out.

Tumblr does have a business model right now based on ads, and it just started rolling them out on mobile users in April. But the company has been reportedly burning through cash and not yet making a lot of revenue, hoping to bring in $100 million this year. But people are usually pretty unhappy about a free product suddenly peppering them with ads — especially if those ads are dropped into a feed that users have created (just ask anyone how they feel about Facebook ads.) CEO David Karp said at our paidContent event just last month that he wants advertising on the site to be native and unobstrusive.

“We focused on higher up in the funnel, the type of advertising that creates intent,” Karp told us in April. “It gives room for the most creative advertisers to create their best work. I think we’ve started to prove it, and see really good examples of it.”

But that’s a hard nut to crack.

Suddenly, the possible Pinterest model of taking a cut on sales and traffic resulting from users creating digital shopping lists looks a lot less disruptive to the core experience, and potentially more lucrative, than trying to solve mobile display ads for the Tumblr feed. Making money off traffic and sales wouldn’t disrupt Pinterest’s core product, and would generally fit in with the company’s existing user experience, just as promoted tweets are fitting with Twitter’s on both desktop and mobile (a profitable venture so far estimated to bring Twitter $528 million in ad revenue this year.)

So no, buying Pinterest wouldn’t make Yahoo all that hip. But buying the site that has potential to become a strong force in modern, social retail? Seems like a good bet — especially since teens might leave you once Mom joins and you become mainstream.

The idea is somewhat similar to those Magnetic Poetry Kits: Users slide preselected words on top of artwork to create a poem. “The whole process takes less than a minute on your phone or tablet,” Storybird posted on its blog Thursday.

Storybird CEO Mark Ury told me that about 20 percent of the works that users created on Storybird were poetry,”so we knew we had demand.”

On the blog, he outlined the reasons that the company is excited about launching a poetry option:

“1. Fits on a phone, so that our members can use it anywhere. We want visual storytelling everywhere, because people and their stories are everywhere.

2. An even simpler storytelling format. Stories are hard to write and take time! Poetry is short and sweet. We used the same creative constraints for Poetry as we did with books: you can do only one thing, but that one thing is fantastic.

3. Poems are hyper social and look great on Facebook, Tumblr, and Pinterest. Your friends, family, and fans can easily read, share, and embed them.

4. They’re stunning. Poetry scales from the phone to the desktop (an AMAZING engineering and aesthetic feat from the team) to ensure the art looks great. It uses the same colour algorithms as our book covers and includes a light transparency on the word vessels, which makes the final compositions elegant and rich.

5. As with books and artwork comments, Poetry is designed to be family friendly. The word sets are fixed and were developed by a seasoned book editor from one of the Big Six publishing houses to enable creative expression without creative maligning.” (Ury wouldn’t say who the editor is.)

Storybird, which launched in 2010, has over two million members. The company has raised $850,000 in seed funding and is advised by former Tumblr exec John Maloney. The site operates on a freemium model, selling memberships to teachers and individuals, and also lets users pay to download stories as PDFs or order print versions of their creations. If the poetry model takes off, Ury says, Storybird will “sell downloads to print at home. If those do well, we’ll offer professionally printed cards or small posters.”

Many Storybird customers are schools. The poetry option isn’t rolled out for school accounts yet, but will be available to them soon.

Our initial speaker lineup is packed with a lot of really great thought leaders, who will discuss their ideas around connected devices, new web designs, future platforms, like our bodies and our cars, and how the world will change when everything has a ubiquitous wireless connection. Here are some of our amazing speakers:

• Kevin Systrom, Co-founder, CEO of Instagram
• David Karp, Founder, CEO of Tumblr
• Yves Behar, Founder, Chief Designer of fuseproject
• Tony Fadell, Founder, CEO of Nest
• Evan Williams, CEO, The Obvious Corporation
• Scott Wilson, Founder, MINIMAL
• George Blankenship, VP Worldwide Sales and Ownership Experience at Tesla
• Steve Case, Chairman, CEO Revolution
• Oren Jacob, CEO ToyTalk
• Alex Ljung, Founder, CEO SoundCloud
• Paul Mascarenas, CTO Ford

We believe the intersection of connectedness and design is going to be a topic of discussion for a while, so we are creating an exclusive book (and e-book) for the attendees of the conference. We have invited many thought leaders and speakers to contribute to this handbook of the future.

Like the 2011 edition of Roadmap, there are limited amount of tickets (buy one early here). And if your company is interested in becoming one of our sponsors, please contact eventsales AT gigaom.com.

Image courtesy of josullivan.59, and emanueleED.

Qian Jin of Nanjing, China, has applied to register marks like Foursquare, Twitter, Quora and Instagram and has also bought dozens of websites like Pinterests.com and Pinterest.de

Qian’s activities are described in a lawsuit filed by Pinterest last week in San Francisco. In its complaint, the popular image site says the defendant is a “serial cyber-squatter who has registered and owns hundreds of infringing domain names.” The company points to Qian’s “Pinterests.com“, a site that uses red-lettering similar to Pinterest but that appears to be just a dumping ground for advertisements.

While this type of cyber-squatting has been around for years, the Chinese efforts stand out because they appear to systematically target up-and-coming internet firms, and because of the trademark applications.

While firms like Pinterest can challenge the trademark filings in the US if they are not in good faith, the situation in China is murkier. Increasingly, Chinese firms are obtaining questionable trademarks and successfully asserting them against companies like Apple. Peter Toren, a former prosecutor and Washington intellectual property lawyer, has previously described some of the cases against Apple as “a stick-up.“

Pinterest is asking the San Francisco court for damages and for an order barring Qian Jin or his associates from using its name. The company also wants the court to instruct the US Patent and Trademark Office to refuse the applications for “Pinterest” and “Pinterests.”

Here are some of the other names Pinterest is trying to reclaim, followed by a copy of its court complaint:

Pinterest Complaint

As appealing as these kinds of services are for users, however, they still have to be paid for somehow, which raises the question: What happens to advertising in a world made of streams?

As Choire Sicha notes in a post on this topic at The Awl, it’s great to look at the clean and stripped-down design of a site like Medium or an online discussion community like Branch or a lightweight blogging platform like Svbtle, but part of the reason they are so attractive is that they have no ads. While some new ventures like App.net are hoping to build platforms that are funded by users and the developers who build for them, content-oriented networks and services typically have to rely on some kind of advertising — a challenge that both Twitter and Facebook are confronting as well, with mixed success. As Sicha puts it:

“The late-day pasting-on of revenue programs to pretty products makes monster hybrids, and that just makes a lot of Dr. Frankensteins sad. It’s a little galling after they’ve all made it clear just how revolting they find advertising to find them circling back around later.”

Irritating people into clicking isn’t working

The cruel reality is that traditional advertising, with its banners and popups and site takeovers and other eye-grabbing tricks, is fundamentally irritating — and it becomes even more so when it interrupts a conversation or a social activity. As even advertising giant Sir Martin Sorrell of WPP has pointed out in comments about Facebook, the more socially oriented a service is, the more difficult it is to make advertising work in the way it did with more traditional forms of content and older platforms. Then, the reader was held captive to a certain extent, but in a world of digital streams that’s no longer the case.

So what happens to advertising? At the moment, everyone seems to be searching for an answer to that question. Sites like The Huffington Post and Business Insider — which aren’t very stream-like at all — are relying primarily on traditional banner ads and other kinds of display ads to pay the freight. But while there is some money to be made with that approach (provided you have billions of pageviews to throw at it) that market is rapidly becoming super-saturated, to the point where clickthrough rates are being measured in thousands of a percent, and some of those are probably occurring by accident.

BuzzFeed founder Jonah Peretti

Some sites that are more stream-oriented, like BuzzFeed and Tumblr, are taking a different approach: BuzzFeed, for example, doesn’t use any traditional display advertising at all — instead, it works with advertising partners to create viral content that gets integrated into the BuzzFeed network, in the hope that some of that content will work its way into people’s browsing and link-sharing activity without them realizing that it’s advertising. Tumblr, which has repeatedly refused to implement any form of traditional advertising, is working on promoting branded content in a similar way.

When advertising is just another form of content

As Sicha points out, the sites and services that seem most compatible with that approach are Pinterest and its ilk, where users spend their time collecting photos and links to things they like — which in many cases are probably also things they will want to buy. That kind of information could be hugely appealing to brands, and so could creating a Pinterest collection of their own. Medium, which is taking a similar kind of collection-based approach to content, might also be able to appeal to advertisers on that basis. But how would users respond to advertising or explicit marketing in that environment? That’s not clear yet.

This model, which is to make advertising as “native” as possible — so that it looks more like the environment it appears in, instead of something irritating that is pasted on top of it, or stands between you and the content you want — is the one that seems to have the most potential, but it’s also the one that is the hardest to implement. Why? Because instead of just coming up with a standard banner or display ad, all of a sudden you have to create interesting and/or engaging content in the hope that someone will pin it or retweet it or share it in their stream.

That might seem easy if you make attractive shoes or potato chips that everyone likes, but it gets exponentially harder with other products and services. And even if you create a viral ad that gets shared millions of times, as Old Spice did with its infamous “I’m on a horse” campaign, there’s no guarantee that that is going to actually translate into sales. That’s why major brands of all kinds are pouring billions of dollars into developing their own content channels, whether it’s YouTube or a Tumblr or a blog inside Forbes magazine’s advertiser network (another form of native marketing).

The bottom line is that if advertising is just another form of content — and content is moving towards a world of mobile streams — then you have to figure out how content works now, instead of just slapping your banner ad on top of someone else’s. We may be seeing the initial seeds of the future with things like Twitter’s “promoted tweets” and Facebook’s social ads, but the backlash that even those experiments have produced makes it obvious that there is still a lot more work to do.

Post and thumbnail images courtesy of Flickr users Tony Margiocchi and Rosaura Ochoa

The company announced Wednesday, “We’re really excited to have the capacity to offer Pinterest to more people and if you’re a Pinner with friends who’ve been waiting on the sidelines, we hope you’ll let them know.”

Japanese e-commerce site Rakuten led a $100 million funding round in Pinterest in May.

According to Comscore’s June “State of the Internet” report, Pinterest had about 19.5 million unique monthly visitors in March 2012, making it the fastest growing social media site of the year.

Trapit’s web version has over 25,000 users a day and the company says they spend an average of 16 minutes per visit. The company is based in Palo Alto, Calif. and is venture-backed by Horizons Ventures and SRI International.

As in the web-based version, users start by searching for a subject or URL. They save it as a “trap” and improve its recommendations over time by tapping a thumbs-up or thumbs-down and selecting the reason they don’t like a piece of content. Trapit doesn’t rely on content from social networks, pre-set topics or specific feeds the way apps like Flipboard do.

“Flipboard is essentially an RSS feed,” Trapit co-founder and Chief Product Officer Hank Nothhaft told me. “It’s not bringing anything new to the table. It’s not highly personalized or relevant. We’ve taken the opposite approach. We’re all about user-generated interest, being selfish and really reveling in the things that you like.” Trapit scours content from about 120,000 sources, up from 100,000 last year. In the past few months, the company also cut about 10,000 sources based on user feedback.

The Trapit iPad app lets users share their finds through Twitter, Facebook, Pinterest and email, and they can use a “read later” button to create a reading list. Other unique iPad features include Retina display optimization, voice recognition and a reading format that “shares the love with the original publisher” of a piece of content.

Other apps “lift, borrow or steal a good chunk of content and text and present it in their interface,” Nothhaft said. “We set out to create a seamless browsing experience” that serves pages within the app but shows their original design, videos, comments and ads and counts as a site visit.

Coming soon: Publishing partnerships and “source-based traps”

Nothhaft said Trapit is making “a lot of inroads with publishers,” just signed its first deal with a magazine and will add premium content soon — not just “the usual subjects like newspapers with paywalls,” but longer-tail content centered around topics like crafts, cooking and DIY. While a revenue model isn’t decided yet, users could upgrade to the premium content or just buy it buy the piece.

That is the opposite approach that magazine joint venture Next Issue Media takes with its “all-you-can-read” tablet magazine subscriptions and focus on popular publications. “Big magazine content doesn’t make sense in a Trapit context,” Nothhaft said, describing approaches like Next Issue’s as “antiquated” on a tablet platform. “We like the idea of unbundling and breaking a [magazine] issue apart.”

In addition, Trapit plans to add the ability to pull in all posts from a given website. (When I wrote about the company last November, I mentioned that Trapit could not yet replace my Google Reader because I want to read all posts on a few sites and don’t trust an algorithm not to miss something.) “This makes sense to us even though it’s not the core of what we do,” Nothhaft said. “The combination of deep personalization with the ability to follow the sources you really love eliminates the need for multiple [content consumption] apps.”

Publisher Simon & Schuster is playing up the “first time” thing with a social media campaign, “Do you remember your first time?” Shelf Awareness explains:

Readers may discuss and share memories about Forever (or any Judy Blume book) using the Twitter hashtag #JudyBlumeForever. If you include the phrase “@Judy Blume’s Forever is finally available as an eBook” on your Facebook page, it will automatically post to Judy Blume’s fan page as well. The Forever home page includes links to purchase the e-book edition, and a link to repin your favorite Blume book covers on Pinterest.

Judy Blume titles have passed between publishers over the year, and the rights to the books are still spread among publishers who have chosen to release the ebooks at different times. Penguin released the five “Fudge” books as ebooks last year, for instance, while Random House released 10 titles, including Are You There, God? It’s Me, Margaret and Deenie, as ebooks for the first time this year.

In addition, Pinterest enabled in-board play for Kickstarter, Slideshare and Soundcloud, “so you can curate great collections of projects, presentations, and sounds, and play them right there on your boards.”

According to Bill Rosenblatt, an engineer and authority on digital rights issues, the two sides are likely in a logjam over how — or if — Pinterest should use Getty’s image detection software, PicScout. Getty acquired PicScout, which tracks images across the Internet, last year for $20 million.

Rosenblatt speculates that Getty wants Pinterest to license the technology. This would allow Pinterest to take on a role similar to YouTube, a company that responded to copyright criticism by offering rights owners a tool to track and monetize their content:

If you make that analogy, someone like Pinterest, if they feel they’re getting a significant amount of legal threats, it would be reasonable to adopt that technology as a prophylactic against legal action.

The problem is that Pinterest, which is now valued north of $1 billion, might be equally inclined to tell Getty and other image owners to jump in the lake. The site has claimed in the past that it is protected by “safe harbor” rules that protect websites from being liable for users’ activities as long as they comply with takedown requests. If the rule holds, Pinterest should be no more responsible for someone posting a copyrighted picture than a search engine should be for listing a file-sharing site in its search results.

Getty could, of course, go to court and try to evict Pinterest from its safe harbor by showing it controlled the user content — maybe by pointing out that Pinterest fiddles with links attached to the photographs. But that’s not a slam dunk case. Likewise, Getty could try to affect the Pinterest user experience by taking down as many pictures as possible, but, as Rosenblatt notes, Getty isn’t large enough to have that big an impact.

The upshot is a stalemate. Getty and other image owners can huff and puff about infringement, but the reality is they may not have much legal leverage. In the meantime, Pinterest is taking steps to improve its relationship with photographers by, for example, making attribution easier and offering “do not pin” options.

Surely there is a way for the sides to find a viable business model before someone pulls the lawsuit trigger.

For now, Getty would only repeat its claim of four months ago that it’s “discussing it” with Pinterest. The the latter is saying nothing at all.

See also: “Pinterest: Is it a Facebook or a Grokster?“

(Image: Cora Reed via Shutterstock)