This thursday, Pandora, the streaming online music service, is set for its IPO. Right now the numbers value the company at around $2 Billion. I would like to open the floor for insight into its use, acceptance, competition and future. Particularly, what unique value does Pandora have as a product against other music companies? The space of competitors could range from streaming services, to traditional online music stores with selective taste oriented recommendations, to satellite radio and beyond.

For my opinion:

I like Pandora as a product, but I like the idea of the stock even more. Why?

1) They have first mover advantage: I think the company got the jump on everyone else in the understanding of people's music preferences. The "Music Genome Project" was the first large undertaking of its type to undertand what the different genres and subgenres of music people like. They have published that they have a 50% market share in the internet radio space.

2) They benefit from the expansion of mobile broadband: Pandora is available as an application on most mobile platforms. Being an audio streaming service, it uses less bandwidth than other commonly used streaming media services, many of which are streaming video services. This means it will most likely continue to have high-availability without added bandwidth cost.

3) The particular market Pandora represents: LinkedIn's IPO was a roller-coaster ride. I think the company rose more than about 100% the first day, and has settled down 20% from that value since. The huge discrepancy between the IPO price and the market price can be attributed to the market's hunger for all these new technology brands, especially in social networking. Pandora, however, isn't social networking. There isn't as big of a risk of a subsequent IPO which would cause competition for ownership of another company in the same space. There is, however, still the risk for volatility around the IPO, as with almost all Tech IPOs.

4) Selective marketing as a revenue driver: Much like social networking companies, the advertising in Pandora can be matched with particular demographics based on their music preferences. This ensures that the company will be able to continue to offer a free service without too many interruptions for the end user, and still be profitable.

Connor, also, Have you checked out Spotify?

Im overseas right now so it won't let me access it. But apparently its an amazing British app. Lets you access and play from a 13 million song database for free.

With that, Pandora has no competitive advantage whatsoever. added onto the effect of GrooveShark.