NEW YORK (TheStreet) -- While it would be best for Pandora (P), the tech/media sector and maybe even the music industry if Yahoo! (YHOO) or Google (GOOG) bought Pandora, I'm warm to the idea of a merger with Sirius XM (SIRI). In fact, some signs point to a deal between the two companies making more sense than a tech company swallowing Pandora whole.
A Pandora/Sirius XM merger wouldn't provide the (wonk, wonk!) synergies Yahoo! or Google could, but it would address several issues at or near the top of both P and SIRI's agendas. And you might not need to step over Tim Westergren's dead body to get this type of deal done, particularly because Sirius XM doesn't pose quite the same threat as Yahoo! or Google to Pandora's way of life. A combined Pandora-Sirius XM accentuates strengths, compensates weaknesses and forms a unified front against real and perceived enemies -- the cornerstones of worthwhile M&A.
Pandora Gets Stronger in the Car
Pandora has indicated it might use spoken word programming to maximize in-car listening.
The theory goes: a considerable portion of listening happens in the car. And, outside of random comedy skits, Pandora doesn't have talk programming. Only music. To keep its core listening longer and grow its audience, the addition of, say, news/talk/sports makes sense. While Pandora could build these franchises on its own, it's not easy nor is it cheap. Because Sirius XM has all of the above -- and more -- in place, a merger solves Pandora's in-car/spoken word dilemma.
A quick devil's advocate to that idea -- why would Pandora need to go to such strides? If it wants spoken word programming, but doesn't want to produce it on its own, it could very easily partner elsewhere. For example, terrestrial radio companies are so desperate there's no way they would (in their right mind) turn down an overture from Pandora to broadcast programming over its platform.