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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Today Pandora Officially Crushes Terrestrial Radio

Stocks in this article: P ARB

While executing marriage proposals on a large scale would likely be too big an endeavor for Pandora to undertake, given the potential return, this story is not only incredibly important on its own; it ties into the ratings and advertising angles.

Over the years, terrestrial radio has done a solid job connecting with listeners in many ways. Things such as Casey Kasem's "Long Distance Dedication" and standard requests and dedications, particularly late at night, have always helped build the bond. Creating loyalty with listeners drives ratings, which, obviously, aids efforts to sell advertising. With that in mind, Pandora could make a feature out of this. It does not have to go large scale, but it does not have to be -- and should not be -- a one-time thing.

Maybe more importantly, Pandora sales reps can use this story as a way to break the ice with skeptical advertisers. If we can target one of our millions of users in such a personal and powerful way, we can target your prospective customers in similar fashion.

I would have to assume Pandora's sale force hit the phones and the streets with this story and new ratings statistics today. While the results might not show up in this quarter or the previous quarter the company reports on next week, I expect to start seeing continued revenue growth and an influx of ad dollars coming to Pandora instead of terrestrial radio.

Because Pandora could lose a considerable portion of the 42% or so it has tacked on in the last month (the stock hit an all-time low of $7.83 in April and traded for $11.13 midday Wednesday), proceed with caution in the near term. That said, I am not sure a better long-term opportunity exists in the stock market today.

At the time of publication, the author was long P.

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