Online radio company Pandora debuted on the New York Stock Exchange on June 15 with shares surging more than 63%.The company raised $235 million in its IPO, selling shares at $16 a piece. During its the October-ended quarter, the company reported revenue nearly doubled to $75 million. Pandora's adjusted profit came in at 2 cents a share. Analysts were looking for revenue of $71 million and a loss of 1 cent. Despite topping analysts' estimates, the company has faced skepticism about its ability to turn a profit as well as its power to fend off stiff competition from tech giants like Amazon (AMZN) and Google (GOOG), as well as upstarts like Spotify, all which are trying to gain market share in the online music space. These concerns have sent Pandora shares sliding nearly 40%, closing Friday at $10.78. Analysts believe much of Pandora's growth will come from its mobile business. Around half of Pandora's advertising revenue came from mobile devices last quarter, Pandora said. "The recent rise of smartphone and tablets as mobile platforms that Pandora can take advantage of should be a strong driver of listener hours and advertising revenue as the penetration of these devices continues to expand," BMO Capital Markets analyst Edward Williams wrote in a recent analyst note. Pandora lets listeners create personalized radio stations based on their tastes. Listeners can then provide feedback by selecting "thumbs up" or "thumbs down" to influence the types of songs that are played going forward. The service is available for free through the Web, tablets and smartphones and is also integrated into the sound systems of several car makers. The company's iPad app is the most downloaded free app in the history of Apple's (AAPL) App Store and its iPhone app is the second-most popular, following Facebook.
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