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I also wonder if Greenfield and other Pandora bears have ever gone beyond merely using the service before they formed an opinion about it. I have.

I am not a Pandora bull because I like the service. That's a horrible way to invest. I want to see things firsthand. I want to make an informed investment and write articles that go beyond the observations any everyday user of Pandora could make. As such, I spent my own money to travel to Pandora headquarters in Oakland and take a look around.

From what I understand, Greenfield has never paid a visit to Pandora, on his own dime or anybody else's for that matter. He does ask questions on the company's conference calls. I guess that's a start.

While in Oakland, I saw The Music Genome Project in action. It's not a jukebox. It's not some computerized playlist. In this age of automation, I was almost shocked to see it staffed by real people. Several of them. And they're not just any old real people. They're musicians who play every night and call "Music Analyst at Pandora" their day job.

Each day when a Pandora Music Analyst comes to work he or she receives a list of songs. The analyst proceeds to go through no less than seven pages of ratings that cover every angle imaginable about the composition of that song. The amount of thought (and over a decade's worth of innovation) that goes into each song the Music Genome Project assesses boggles my mind. This is not a mere recommendation engine; this is a proprietary system that nobody else can even come close to.

Over at All Things D, the great Peter Kafka made a comparison between Pandora and Spotify that investors should not overlook:

Pandora programs music based on a complex algorithm based on songs' musical "DNA." Which means that if you tell Pandora you like the Ronettes' "Be My Baby" it will find other songs that feature "rock & roll roots," "a subtle use of vocal harmony," "acoustic rhythm piano," etc. But Spotify says it is relying on the "social graph," so it will find music that people who like the Ronettes also like.
.

And that's seven screens' worth of "etc." But, bottom line, what Kafka points out is critically important.

While the barriers to enter Internet radio might be soft, it takes years to present it the way Pandora has. And you do not simply build the necessary infrastructure or scale to meaningfully penetrate an establishment like the radio advertising industry overnight.

Beware of analysts like Greenfield. They need to spend more time assessing the work a company actually does as opposed to wasting away their days refreshing the Apple App Store rankings and shooting YouTube fan videos.

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

Stock quotes in this article: P, AAPL, NFLX, FB 

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