Pandora Media Inc (NYSE:P) named its new chief executive officer yesterday, venture capitalist Brian McAndrews. He replaced Joe Kennedy ‘effective immediately,’ according to a report in USA Today. The company hopes that McAndrews will be able to bring in revenue from online ads and satisfy investors who have driven stock prices up even though the company is still posting a modest EPS.
Pandora under pressure
Pandora Media Inc (NYSE:P) was one of the first companies to offer free streaming music, also called internet radio, and it still has a large user base, but like many internet companies it has struggled to turn that success into actual profits. Other firms like Spotify and Apple Inc. (NASDAQ:AAPL) are moving into internet radio, and Pandora has been under pressure from investors to find a way to bring in more money. The company posted a small profit in the second quarter of this year, which satisfied bullish investors, but only temporarily. While their earnings per share of $0.04 beat consensus estimates of $0.02, there is plenty of room for improvement.
Kennedy announced his resignation in March after a decade at the helm and Pandora Media Inc (NYSE:P) has been looking for a replacement since then.
McAndrews took over ad agency Avenue A in 1999 and turned it into aQuantive, which became the hot digital marketing firm of the moment and was acquired by Microsoft Corporation (NASDAQ:MSFT) in 2007 for $6 billion. After the acquisition McAndrews joined Microsoft, running its advertiser and publisher solutions group for two years. He spent the last four years as an investing partner at venture capital firm Madrona, focusing on technology in the early stages of development.
“No one better understands the intersection of technology and advertising, which he clearly demonstrated during aQuantive’s meteoric rise,” said Pandora founder Tim Westergren.
Microsoft Corporation (NASDAQ:MSFT) ultimately wrote off the entire deal, but investors are still excited that McAndrews is taking over Pandora. Even if aQuantive didn’t work out for Microsoft, there’s no question that McAndrews was able to drive impressive growth. Pandora Media Inc (NYSE:P) shares went up 6.5 percent following the announcement, hitting $21.38 in after-hours trading. The company’s stock price has more than doubled this year, outstripping the S&P 500 (INDEXSP:.INX) that many people feel is overbought.