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Why Apple Should Avoid Internet Radio

Jeremy Bowman
September 21, 2012

Apple (Nasdaq: AAPL  ) made waves recently when it announced plans to enter the Internet radio market. Two weeks ago, the tech titan revealed it had started negotiating licensing agreements for its own streaming service. The market responded by sending shares of Pandora (NYSE: P  ) down 17% that day, apparently saying, "What Apple wants, Apple gets."

But the move seems like a bit strange for the Cupertino Colossus. While Apple helped remake the music industry with the iPod and iTunes, Internet radio is very different racket than the iTunes model, with most revenue coming from advertising. Unlike rival Google (Nasdaq: GOOG  ) , for example, advertising ha