This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sell Pandora: It's About to Become a Thing of the Past

Stocks in this article: P AMZN

Pandora Does Not Have a Growth Problem

The fact that growth is slowing/moderating at Pandora doesn't concern me at all. Not one bit. The way the company decided to handle this reality baffles me, but the reality itself -- it's truly immaterial.

Because, as I detailed late last year, Pandora has been telling us for years that growth would moderate. In fact the company's former CFO Steve Cakebread discussed this with me in 2011. But that's back when Pandora was a straightforward company, not one that employs thin PR spin.

Pandora can't possibly command every household in the U.S. as a listener. It's already a wild leap to say it is has 250 million users. Back out pets, duplicate accounts, dormant accounts and such and the number would be much lower. And that's OK.

That said, Pandora still has massive scale. And it has the tools necessary to more than convince advertisers that they should send considerable portions of their budgets Pandora's way. If Pandora stopped growing -- and simply maintained its present core audience (but got it to listen longer) -- I still wouldn't worry. Nobody can come to advertisers with a stronger pitch than Pandora.

However, as we connect the dots throughout this article, I'll argue that broadcast radio (that's traditional radio) appears to finally be getting its act together. It, unlike Pandora, believes in and is beginning to use the power of the data it collects in innovative ways. Being the Internet radio leader going forward will mean more than getting the listener experience right and having an effective sales department. Interestingly, Pandora will likely maintain the largest market share of all the Web radio players for some time, but that won't matter much unless it gets serious about expanding and specializing its now non-existent data business. 

Pandora's Not Fully Embracing the Amazon Way

McAndrews foolish comment -- We don't see (the deal) as a significant development for us ... -- should win him a permanent spot on Jim Cramer's CEO Wall of Shame.

When I first heard Pandora CFO Mike Herring not-so-indirectly refer to doing things the Amazon way, I bought it:

... Setting aside my very appropriate obsession with data, Pandora absolutely still has enormous opportunity to seize in the advertising space, particularly mobile.
Next time I see Herring I will kiss him. It's about time somebody borrowed the pair Jeff Bezos walks around with and used them for some good in the broad tech space.
The fact that Herring was allowed to make that comment gives me great confidence that the entrepreneural culture remains intact at Pandora (which makes me think the company is probably on the same page with me on the data obsession !). Not that there was ever reason to doubt it.

But I then I checked myself, particularly the Setting aside my very appropriate obsession with data part. And I said NO! I can't set my obsession with data aside. I would be as negligent as Pandora is.

3 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs