Will This Move Save Pandora From Apple?

Sponsored stories appear to be a win for Pandora, but could be just a drop in the bucket as Apple still looms large.

May 19, 2014 at 9:30AM

Streaming radio upstart Pandora (NYSE:P) certainly has plenty going against it to keep investors awake at night.


Source: Pandora

Always admiringly undeterred, Pandora recently made yet another move aimed at bolstering its (eventual) bottom line with the introduction of Sponsored Stations. As the name alludes to, Sponsored Stations are a way for Pandora to create, with the help of an advertising partner, a curated music experience surrounding some kind of branded campaign for its users. To be sure, Sponsored Stations, and their potential to drive some degree of additional growth for Pandora, are undoubtedly a win.

However, at the same time, Sponsored Stations might not be a remedy for some of the looming issues facing Pandora in the months ahead.

Seeing the forest through the trees
Pandora has far bigger fish to fry as we quickly speed toward the second half of the year. Most notably, tech giant Apple (NASDAQ:AAPL) is intent upon doubling down on streaming radio later this year with some kind of follow-on product to its already-launched iTunes Radio. Apple's intent to go on the offensive against Pandora once again has only been reiterated in the past few days, as Apple's possible Beats Audio buy also strongly suggests this same strategic agenda.

While Pandora has certainly notched a solid win with the Sponsored Stations move, budding risk factors, like Apple's renewed interest in streaming, and Pandora's own user growth issues, should probably weigh more on its investors' minds, as tech and telecom specialist Andrew Tonner argues in the video below.

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Andrew Tonner owns shares of Apple. The Motley Fool recommends Apple and Pandora Media. The Motley Fool owns shares of Apple and Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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