Pandora was saved by the iPhone, and now it has ambitions to turn public, Claire Cain Miller at the New York Times reports.The music streaming service was profitable on $50 million in revenue last year, according to Claire’s reporting. An analyst tells her it could do $100 million this year. Revenue comes from advertisements, subscriptions and payments from Apple and Amazon.
Pandora struggled to build a business for years, but when the iPhone opened up to third party applications, Pandora started adding 35,000 users per day, double what it was doing before.
It had a near-death experience in 2007 when a court ruled that Pandora, and other web-based radio services, would have to pay $0.0019 per song played. The royalty was later reduced to $0.0008 per song, or 25% of revenue, which saved Pandora.
Now, Claire says the company is being courted by investment banks. It hired Steve Cakebread as CFO. He was CFO at Salesforce.com when it went public.
So, could Pandora actually go public? Certainly, but we don’t see it any time soon. A company needs to hit these metrics to go public, according to Fred Wilson:
- Revenues greater than $100 million
- EBTIDA greater than $10 million
- Growing both faster than 25% per year
- You are *absolutely sure* you can make your numbers for at least three years out
If Pandora can hit those targets for two years, then it might get serious about an IPO. For now, it’s just warming up.