In a year of major changes at Pandora (P) , the company's stock stood largely in one place.

Through 2016, the internet radio company changed CEOs, moved its finance chief to a strategy position and on Tuesday announced the resignation of its chief operating officer, Sara Clemens. While there have been repeated stories about acquisition interest, primarily from John Malone's Sirius XM (SIRI - Get Report) , Pandora's business has shown signs of weakening.

Total losses for the first nine months of the year totaled $250 million, further frustrating investors who expected Pandora could reach sustained profitability. Adding to the angst, Pandora counted 77.9 million active listeners to its free, ad-supported service at the end of September, a decline from 78.1 million for the same period in 2015.

Pandora shares were off 1.7% Wednesday afternoon to $13.19, giving its shares a 1.6% decline for 2016.

The spotlight is clearly on Tim Westergren, Pandora's co-founder who returned in March as CEO to give direction to a company integrating two significant acquisitions: Ticketfly, the concert ticket and promotion service purchased in October 2015, and former rival Rdio, acquired a month later.

Much of Westergren's work this year has appeared to be around integrating TicketFly and Rdio into radio products as well as its long-awaited, much-anticipated on-demand service, Pandora Premium, due to be released for public consumption in the first quarter. (A beta of Pandora Premium will be made available to a small number of users in the coming weeks.)

Clemens' resignation, effective Dec. 16, comes at a particularly important time for Pandora.

Mike Herring was moved from finance chief to president in November, and a new CFO has yet to be named. Clemens, a former Microsoft (MSFT - Get Report) and LinkedIn executive, was hired in February 2014 by former CEO Brian McAndrews to help spur Pandora growth both in the U.S. and abroad. Execution questions still remain in her wake.

"Clemens did drive a lot of the acquisition strategy including TicketFly and Rdio," said Neil Doshi, a managing director at Mizuho Securities USA in San Francisco. "But Pandora appears to be tapped out on M&A, so now it's going to be critical to execute on strategy."

That strategy is basically two-prong: reversing subscriber declines and weaker ad sales at Pandora's free radio business and ensuring a successful launch of Pandora Premium, which will more directly compete with Spotify, the streaming-music industry's leader, as well as Apple (AAPL - Get Report) Music and Jay Z's Tidal.

Throughout the run-up to Pandora Premium, Westergren has emphasized that the company's core business will remain its ad-supported service that competes with so-called terrestrial radio. Pandora has a roughly 10% share of that market.

For Pandora Premium to be successful, Doshi said the service should reach about 2.5 million subscribers by the end of 2017, averaging roughly 1.25 million for the year. That would translate into about $106 million in revenue, Mizuho estimated, thereby inflating Pandora's top line to about $1.67 billion, according to an average estimate of 34 analysts compiled by FactSet.

While investors may continue to give Westergren more time to reach profitability, they'll be less sanguine if Pandora cannot show steady increases in listeners and subscribers.

"The most important metric for Pandora is total monthly active users, and that number has been in decline," Doshi said. "2016 was this big investment and re-positioning year, and this coming 2017, there's going to be a big focus on execution. It's going to be critical to show good traction in terms of subscribers."

A Pandora representative had no immediate comment beyond the resignation announcement.