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Why Google or Amazon Would Screw Up Pandora

Maybe most importantly, the Pandora sales staff consists of former terrestrial radio salespeople, including several very successful and high-level ones. If you're a business and the rep who has been selling you local radio in your market for years, if not decades, lets you know he or she has made the move to Pandora, you're going to listen to what this person has to say.

Relationships, like the ones solid sales reps forge with clients, matter. Sales call by sales call, presentation by presentation, Pandora continues to cultivate these connections, chipping away at what was once broadcast radio's foothold on billions in ad dollars.

It's one thing for Westergren and other Pandora executives to sit around a boardroom and explain this to a Google or Amazon. It's entirely another for the latter to listen, comprehend and respond productively after an acquisition.

While Clear Channel might get it, the company is such a mess -- saddled with $21 billion in debt, on the hook to private equity and in perpetual cost-cutting mode -- that it has no business buying a growth machine like Pandora.

If I am on the Pandora Board of Directors, I want a document signed in blood that says -- anybody who buys us leaves us alone. We operate with complete autonomy. Fund us and let us continue as we were. Treat us like a startup, separate from your corporate structure, but handed car keys and a company credit card. And don't expect us to wear protection.

Even with a suicide pact, I have no confidence that a new owner would not, at the very least, meddle and, more likely, sell Pandora down the river for the benefit of something like Google Adsense or Amazon Prime.

There's a time and place for M&A. This isn't it. Other than the prospects of having a war chest at its disposal (probably only possible with Google), there's nothing good about a Pandora minus its independence. It would end up divided against itself.

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

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Rocco Pendola is a private investor with nearly 20 years experience in various forms of media, ranging from radio to print. His work has appeared in academic journals as well as dozens of online and offline publications. He uses his broad experience to help inform his coverage of the stock market, primarily in the technology, Internet and new media spaces. He has taken a long-term approach to investing, focusing on dividend-paying stocks, since he opened his first account as a teenager. Pendola, 37, is based in Santa Monica, Calif., where he lives with his wife and child.
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