Google Inc (GOOG): A Pandora Media Inc (P) Threat?

At present, Google Now is capable of doing only basic tasks. (For example, Google Now can do things like warn the user that traffic is heavy on the route to work, or give sports scores of a favorite team.) But Google continues to work on improving the service.

Collecting data on listening habits could thus prove useful. Someone who frequently listens to Taylor Swift would probably like to be alerted when her concert tickets go on sale. On the business side, Google could collect data on its users’ listening habits and sell advertising based on that knowledge.

Is Google’s All Access a threat to Pandora?

With Google Music being a tiny sliver of the search giant’s business, and other streaming music companies being private, Pandora is really the only stock available for investors to play the trend.

Is Google Inc (NASDAQ:GOOG)’s service a threat to Pandora Media Inc (NYSE:P)’s business? Not directly. Despite the fact that the streaming music business is increasingly crowded, Pandora has one feature that separates it from others — it’s free on mobile devices.

With the exception of Grooveshark (of dubious legality), all other streaming services — including Google’s — require a monthly fee for access on mobile devices. That means, for users who want streaming music on their mobile devices and don’t want to pay for it, Pandora remains the only option.

But that could change. Spotify has been fighting to bring free streaming music to mobile devices, and though it hasn’t succeeded, if it ever does, it would be a tremendous blow to Pandora Media Inc (NYSE:P).

Still, Google’s decision to jump into the market brings forth yet another competitor to Pandora — and one with a big name.

Google Music in context

So, while Google’s All Access won’t revolutionize the world of streaming music anytime soon, the service isn’t a failure. It puts pressure on Apple’s competing mobile ecosystem, and allows Google Inc (NASDAQ:GOOG) to collect data on its users’ listening habits, data that could prove to be immensely useful at some point in the future.

The article Google’s Me-Too Music Service Isn’t a Failure at All originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

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