As Ciaccia noted, people have finally caught on to the notion that local advertising is a windfall for companies such as Pandora and Yelp ( YELP). And that Spotify and even Apple's iTunes Radio are complementary to Pandora.

One thing we don't hear about often enough is Pandora's scale.

That's what La Monica failed to mention. And it's a large part of what makes his argument and the leftover Pandora bears' arguments so weak.

Pandora has achieved massive scale. No other Internet radio player -- regardless of delivery style -- comes close to 71.2 million active listeners. It's that scale that allows Pandora to sell advertising. This is how Pandora makes most of its money with a supplemental bump from Pandora One subscriptions.

You simply cannot sell advertising at the national or local level without scale and the ability to effectively target key demographics. Even as Spotify continues to grow impressively, it's doubtful it can achieve the critical mass necessary to sell advertising like Pandora does or put together a high-revenue, profitable subscription business.

While I believe people will pay a monthly fee to access unlimited music, that's the crowded space with equally-as-solid, if not higher quality, easier-to-use services such Rdio encroaching. Nobody does pure-play Internet radio like Pandora does. There's a difference between traditional radio as redefined by Pandora and on-demand services.

If you fail to realize these distinctions, you fail to realize the power of Pandora's unique model and first-mover advantage.

Now, with that said, I do sense a bit of -- for want of a better word -- arrogance at Pandora. There's an unfortunate unwillingness at the company to engage adversaries in the royalty fight, work with competitors such as Spotify or partner with small startups to show the music industrial complex just how data and technology can bring the business into the 21st Century.

People at Pandora might use the word focus in lieu of arrogance. I would respond with Just because Apple will not "kill" you doesn't mean you're Apple.

So, as was the case when everybody was skeptical and I was certain Pandora would rise, I'm taking something that vaguely resembles the other side. While I still believe in the company's story and, quite honestly, want it to succeed, it doesn't sit well with me that Pandora appears to be standing still. It needs to evolve and innovate more now than ever -- during this time of unprecedented success -- because, as the PC industry and Blackberry ( BBRY) have taught us, you can't count on scale forever.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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