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Internet Radio: GOOG, AAPL Battle Pandora for Listeners

Google and Apple are fighting to steal Internet radio listeners from Pandora and others.

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Pandora an Internet radio leaderLaunched in 2005, Pandora made its name as a streaming music service that learned listeners’ preferences and used a proprietary algorithm to play songs the listener might enjoy. Naturally, the listener could then buy those songs from a selection of online retailers.

Pandora’s Internet radio service is available for PCs, as a mobile app and through streaming media devices like Microsoft’s Xbox. Options include a free, ad-based model and a premium subscription called Pandora One that currently costs $36 per year.

In a case of new media taking over old, the company actually bought an old-school FM radio station earlier this year. The move was less about nostalgia and more about maneuvering to protect against rising music licensing fees.

Pandora’s active listeners have reached 70.9 million, up 20% year-over-year, and the company counts more than 250 million users — with 2.5 million premium Pandora One memberships. However, analysts quickly noted that one month after the launch of iTunes Radio, Pandora had lost 2 million listeners.

At its IPO in 2011, Pandora was valued at $16. It got off to a rocky start, but has been climbing all through 2013 and now trades at $28.82, which seems over-valued given the threats it’s currently facing.

Article printed from InvestorPlace Media,

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