“Pandora relies mainly on advertising for revenue and has been building out its local sales staff in an effort to gain market share among its competitors. January is typically a lighter month for Pandora and is hard to pinpoint spending from advertisers coming off the holiday season,” Saba reports. “Pandora Chief Executive Joe Kennedy said advertisers are being prudent, a change that occurred over the last couple months. ‘We are reflecting the caution we are seeing,’ Kennedy said in an interview with Reuters about the lowered forecast. ‘I think advertisers are nervous.’”
Saba reports, “U.S. legislators are trying to hash out a deal to avoid a $600 billion package of tax hikes and federal spending cuts that would begin on Jan. 1 and could tip the economy into a recession. Pandora’s fiscal fourth quarter ends Jan. 31, which is why the fiscal cliff figures into its forecast, Kennedy said. One analyst questioned how much the fiscal cliff plays into the revised forecast versus the entry of online music companies including Spotify, Sirius XM Radio, and possibly Apple Inc, which are staking out Pandora’s turf. ‘I think the key issue here is that Pandora is facing increased competition in mobile,” said Richard Greenfield, an analyst with BTIG.’”
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