In a word, earnings. While the Dow Jones Industrial Average (DJINDICES:^DJI) fell more than 160 points as of 11:20 a.m. EDT, the losses in (NASDAQ:AMZN) and Pandora Media (NYSE:P) were far worse, with both stocks experiencing double-digit declines.

Amazon expects to lose a lot of money
Amazon reported second-quarter earnings Thursday afternoon. Although revenue, at $19.34 billion, was in line with analysts' expectations, earnings per share came in sharply below estimates. During the second quarter, Amazon lost $0.27 per share, worse than the $0.15 loss analysts had been anticipating.

Amazon doesn't expect its earnings to improve, either: Next quarter, Amazon expects to lose between $410 million and $810 million. Before the report, Wall Street had been anticipating a loss, but a slight one -- just $10 million.

According to Amazon, much of that loss will be a byproduct of investments in the company itself. Amazon's massive cloud infrastructure, Amazon Web Services, has experienced rapid growth, and Amazon plans to invest heavily to remain dominant in the cloud computing space. Amazon is also looking to invest in original programming for Amazon Prime Video; higher-quality content could yield lucrative Prime subscriptions.

Value investors have often criticized the "free pass" that Wall Street gives the company. Although Amazon has not been profitable for much of its history, investors have continued to prop up its stock price, with the rapid growth the company has generated offsetting the desire for short-term profitability. That may be changing. With shares down more than 11% today, investors may finally be looking for Amazon to generate real profits. 

Source: Wikimedia Commons

Pandora's key metrics are declining
Pandora's decline was even more grim, with shares of the Internet radio giant tumbling over 13% early on Friday. Unlike Amazon, Pandora actually exceeded analysts estimates for revenue and earnings per share ($0.04 on $218.9 million), but investors were disappointed by its guidance and listener metrics.

Next quarter, Pandora expects to earn between $0.05 and $0.08 per share; prior to the report, analysts had been expecting around $0.08. At the same time, Pandora's listener base doesn't appear to be growing as fast as investors had hoped: In June, Pandora's total users slipped to 76.4 million, down from 77 million in May. Likewise, listener hours also declined, dropping to 1.61 billion from 1.73 billion.

Pandora's listener base may finally be facing pressure from its many competitors. Although Pandora dominates online radio, it faces a high degree of competition, including premium subscription-based music services. One such service is provided by Amazon: Amazon Prime members get access to a catalog over 1 million songs they can stream for free, and Amazon has been working to improve the service.

For much of its history as a publicly traded company, Pandora has not been profitable. Investors, looking for rapid growth in a growing space, have been willing to finance Pandora's expansion. If Pandora's listener base is declining, investors may be unwilling to give the company such a lofty valuation.