Coverage Launch on Pandora – $984 Million Valuation

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Pandora is a leader in internet radio in the United States. The company offers a form of radio that provides personalized experiences for each listener based on their feedback. Apart from the products availability over the internet, Pandora has also launched apps available on Apple's ( AAPL ) iPhone, Research in Motion's ( RIMM ) BlackBerry and other smartphones operating on Google's ( GOOG ) Android OS. Pandora has also developed relationships with auto manufacturers like Ford ( F ) and BMW (GR:BMW).

As of January 2011, Pandora had over 80 million registered users, adding a new registered user almost every second. Pandora has over 50% market share in internet radio listening time among the top 20 stations and networks in the United States.


Pandora Coverage Launch - $984 Million Valuation

We have broken down our analysis of Pandora into three main business segments:

1. Mobile Advertising

2. Online Advertising

3. Subscription

Growth in Listeners

Pandora's number of registered users has grown considerably in the past few years. The firm's unique ability to develop programs that cater to the tastes of individual music listeners has driven user growth. On top of that, increased smartphone usage has helped grow Pandora's mobile platform as well. In 2008 it accounted for less than 10% of listener hours, however by the early part of 2011 this figure had increased to over 50%.  The firm is actively strengthening its partnerships with consumer electronics manufacturers and looking to grow its presence in the automobile market for integration of Pandora's music services in automobiles.

Attractive Advertisement Base

Pandora has positioned itself to become a useful advertising platform for various institutions. The strong user base, growth in streaming hours and diversity in user base has attracted many advertisers. The firm enables both local and national advertisers to reach listeners based on their demographics and music type and offers advertisers the ability to choose from a variety of advertisement products which include display, audio and video advertising. Pandora's mobile app is currently one of the most widely used, adding to the attractiveness of the platform to advertisers.

See our full analysis for Pandora here



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: AAPL , F , GOOG , RIMM

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