NEW YORK (TheStreet) -- I am going to do something I have never done before. I'm stealing a trick from Bruce Springsteen, who occasionally begins and ends a show with the same song to weave a common theme or drive home a point. So, if you don't quite get this now, you will by the end of the article.

That puts Pandora behind only Google (GOOG), but ahead of Facebook and Twitter for 2012.

As total mobile ad revenue grows from $2.61 billion in 2012 to $4.41 billion and $6.62 billion in 2013 and 2014, respectively, eMarketer expects Pandora to command a portion amounting to $226.4 million, $349.4 million and $499.1 million in 2012, 2013 and 2014. That's half a billion dollars, or 7.5% of a multi-billion space by 2014
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Impatience Can Spawn Missed Opportunities

For more than a year, I have urged calm, re: the ability of Pandora and other new media companies to generate mobile revenue. For more than a year, more than a few folks ridiculed my position.

But, as it stands, even after Pandora prepares to take another noisy short-term hit on misguided competition fears ( The Wall Street Journal reports Apple ( AAPL) will launch a Pandora "rival"), my long position in the stock is up roughly 20%.

Now, as reality schools Pandora bears, most of the media says things like, no matter how you slice it, Pandora now owns one of the biggest mobile ad businesses on the planet. That's from Jim Edwards at Business Insider.

But, even with most of the media coming to the realization that they were wrong about Pandora, they still fail to understand the company's business.

For example, before Edwards gave the company the above-cited nod for the second time in a week, he focused on legal language in Pandora's most recent 10-Q, concluding, somewhat bearishly that Pandora hired more salespeople, and sold more ads -- but at a huge discount from the prior year. It's incurring greater costs to make lower dollar sales.

Edwards makes two errors in his analysis. One, he states what is obvious to him based on an SEC document. And, two, I can only presume he did not listen or pay attention to Pandora's most recent earnings call.

If you blinked you missed this blurb from Pandora CEO Joe Kennedy. Read closely because it's important:
Mobile revenue was up 86% year-over-year, quite close to our growth rate in mobile hours, which was 96%, meaning that we have narrowed the mobile monetization gap considerably.
In fact if one adjusts the mobile revenue from Q2 of last year to exclude the revenue associated with the single large advertiser we had at that time, our growth in mobile revenue year-on-year actually outpaced the growth in mobile hours.

As I noted last week, Pandora co-founder Tim Westergren told me, "Our story is going to take some time to become clear. But that's fine by me."

Like Westergren, the entire executive team at Pandora refers to the mobile market as "in its early stages." You hear the same from other mobile players, including Facebook ( FB). For some reason, however, the media chooses to ignore this, scratching instead for instant gratification.

If you block all lenses to the future, Edwards has a point. However, he ignores the relationship between mobile revenue growth and Pandora's growth rate in mobile listener hours. As the gap between these numbers narrows, we see increasing evidence that Pandora has jumped the biggest initial hurdle -- mobile revenue is catching up and should soon surpass the rapid increase in mobile usage.

Remember, the beef, which has taken on meme status, has always been that new and social media companies cannot keep up with user migration to mobile. Simply put, they haven't been able to monetize this shift. Pandora clearly has, is and, based on increased guidance for the fiscal year, will continue to.

In terms of how much Pandora makes per mobile ad vs. how much it spends in infrastructure and inventory to get there, you have to consider the magnitude of the mobile revolution. These mountains do not move overnight. Several factors must converge. The process takes time.

Connect the dots.

Advertisers continue to shift dollars from traditional platforms to mobile. As more of them jockey for limited space, ad rates rise. During this transition, Pandora reinvests in its business, expanding its sales staff rapidly. At the same time, content costs moderate, making fixed expenses more predictable. In fact, the amount of money Pandora pays for content acquisition (royalties) only grew by 8.4% sequentially, compared to 15.9, 27.9, 11.7 and 15.7% the previous four quarters.

While I have been outlining this process for many months, the media finally hopped the bandwagon. First, after Pandora reported last week. And then after eMarketer released data (via MediaBistro) showing that Pandora, Millennial Media ( MM) and Apple will collect 14% of the $2.61 billion mobile ad market in 2012.

That puts Pandora behind only Google ( GOOG), but ahead of Facebook and Twitter for 2012.

As total mobile ad revenue grows from $2.61 billion in 2012 to $4.41 billion and $6.62 billion in 2013 and 2014, respectively, eMarketer expects Pandora to command a portion amounting to $226.4 million, $349.4 million and $499.1 million in 2012, 2013 and 2014. That's half a billion dollars, or 7.5% of a multi-billion space by 2014.

While the media was busy doing what it does best -- creating hysteria and overhyped false doubt -- Pandora was at work building a business. Believe me this time, through all of the noise, it still is.

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