It's obvious any number of large tech and/or media companies would love to make Pandora part of their stable. For example, Google (GOOG), rumored to be looking at an acquisition of Songza, could do the best job of taking Pandora under its wing and helping it reach maximum potential. But is Pandora willing to succumb to a buyout?
From what I can ascertain, that question is the subject of intense debate within the company. People are taking sides. And, sooner or later, something's got to give. I have to think Pandora co-founder and former Chief Strategy Officer Tim Westergren holds considerable sway with respect to shaping sentiment. Based on nothing other than the sense I get from the formal and personal interactions we have had in the past, Westergren would be initially hostile to the notion of a buyout, however, he loves Pandora so much he would not let it go up in flames. So he's likely managing his emotional urge to remain independent and stay the present and relatively stale course against the rational choice to knock on Google's or somebody else's door.
Because, as I explained previously on TheStreet, Pandora absolutely needs somebody to buy it.If Pandora calls, Google will listen. In fact, it would probably drop its reported pursuit of Songza in favor of M&A with Pandora. Though there's no reason why Google couldn't or shouldn't buy both. (For the record, I hit up Songza co-founder Elias Roman on Monday. He told me "Can't comment on any rumors, but always happy to catch up generally"). But, suffice to say, for as great as Songza is, Pandora would be more attractive to most tech/media companies. As I speculated in March, Songza belongs in Amazon's barn anyway. All that aside, there's an endgame taking shape here. It's funny to read reporters and columnists speak of the need for and inevitability of consolidation in the streaming radio space ever since Apple (AAPL - Get Report) bought Beats. I was tunneling that trajectory of thought more than a year ago. In fact, in March 2013, within the context of conjecture over a Pandora/Spotify merger, I wrote:
A united Pandora and Spotify . . . a unified front of Internet radio companies -- setting aside whatever meaningless differences they have -- is the way to go to win both the battles in Congress and against the labels. That's how they need to view this thing ...
... it would be pretty freaking powerful for the massive local sales force Pandora is building out to be able to sell complementary services like Pandora and Spotify side-by-side. The national ad agencies would love it as well.Which circles us back (I want to poke my eye out when I hear that buzz phrase) to what becomes of Pandora without a buyout ...
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts