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Pinterest making money by adding tracking code to certain user pins

The new online pinboard is apparently making money by adding tracking code to certain user-submitted pins and getting a cut when someone buys something though the pin. Should this be disclosed?

Screenshot by Lance Whitney/CNET

How does a Web site like Pinterest make money? At least one blogger has found and revealed an apparent answer.

The online pinboard lets people share their interests and other "things they love" by pinning a photo or other image onto the site. Users can then respond to that pin by commenting on it, liking it, or re-pinning it as one of their own favorites.

Sounds pretty cut and dried. But as described by blogging site LLSocial.com, if a user submits a pin that links to an e-commerce site with an affiliate program, then Pinterest tweaks that link to add tracking code for the affiliate, according to the report. If someone clicks on the image and actually buys something from the affiliate, Pinterest gets a cut of the sales, LLSocial.com said.

Adding tracking code to links isn't by itself a cause for concern. A lot of sites do that. What seems to bother the LLSocial blogger instead is the fact that Pinterest hasn't disclosed this bit of information to its users.

The blogger even opines that Pinterest is running this program for two reasons: 1) to generate money in its early beta stage, atypical among new social networks; and 2) to go about this in a "quiet, non-disclosing" manner.

Stressing the nondisclosure aspect, the LLSocial blog also claims that not revealing the tracking code tweaks to individual links puts retailers at a disadvantage. Stores that do have an affiliate program may not be aware of the process or the fact that Pinterest is getting a piece of their sales pie.

"Pinterest likely should disclose this practice to users even if they aren't required to do so by law, if only to maintain trust with their users," added the blogger.

I have to go along with LLSocial on this one.

I have no problem with a site like Pinterest adding tracking code to certain links and getting a cut of sales from its affiliates. The practice isn't uncommon and is actually a smart way for a new site to generate money early on.

But not disclosing the facts up front does make it seem like Pinterest in trying to hide the practice.

Revealing the full details at this point would go a long way toward ensuring the trust of its users, something any new Web site should place as a priority.

Pinterest did not immediately respond to CNET's request for comment.