Pandora Media Inc (NYSE:P) is getting ready to release its latest earnings report this week. As the market waits for what could be stellar results, players may be wondering how the entry of Google Inc (NASDAQ:GOOG) into the Internet radio service space will affect future earnings for the pioneering Pandora Media Inc (NYSE:P).
For the immediate future, I don’t see Google Inc (NASDAQ:GOOG)’s entry into this space as a major threat to Pandora, for a multitude of reasons. Despite Google Inc (NASDAQ:GOOG)’s formidability, I think Pandora has implemented enough sound strategies to compete even with the the Internet search giant.
Google and the others…
At its developers’ conference last week, Google Inc (NASDAQ:GOOG) announced it was launching an online radio service. It’s priced at $7.99 a month (before June 30, when it rises to $9.99 a month). This is higher than Pandora’s $3.99 per month.
Pandora’s audience has grown to an estimated 200 million registered users since it snagged its first one in the summer of 2005. These users should retain some degree of loyalty to Pandora, and I doubt that a significant number of them would jump ship to Google Inc (NASDAQ:GOOG)’s music service, especially when the latter’s higher price is factored in.
Also, Pandora has managed to hold its own in the face of several other major players, including Amazon, Apple, Microsoft and Sony. Unlike these others, Pandora’s service isn’t part of some larger plan to draw listeners to other brands in its corporate ecosystem – all in the name of driving advertising revenues up.
And Then There’s Apple…
Still, the next largest threat may be from Apple Inc. (NASDAQ:AAPL). It already has a significant following from iTunes, and the rumor mill continues to spin that Apple Inc. (NASDAQ:AAPL) will launch its own radio service — but that its efforts have been hampered by licensing disputes.
Fool writer Daniel Sparks wrote last month about a rumor that Apple is working on a streaming music service, dubbed iRadio. Sparks pointed out that iTunes dominated the digital music download market last year. Its fourth-quarter market share came in at 63%, according to NDP, down from 66% in 2010. Much of Apple’s decline was Amazon.com, Inc. (NASDAQ:AMZN)‘s gain; the latter company’s market share rose from 13% to 22% in the same period.
Not Wasting Advertisers’ Time
The success of Internet companies these days hinges on their ability to monetize their mobile users, since more people are choosing to go online on their smartphones and tablets, instead of via desktop and laptop computers.