Pandora files for $100-million IPO with hopes of turning a profit

Pandora Media Inc., an Internet streaming radio service used by more than 80 million listeners, announced plans Friday to sell shares in an initial public offering this year. After years of struggling for survival, the Oakland, Calif., company is finally on the verge of breaking even and sees the offering as a way to raise $100 million to grow its business. Pandora, which has a catalog of 800,000 songs from more than 80,000 artists, has roughly half the market for Internet radio in 2010, according to a study published in November by Ando Media. Though the service is wildly popular, it has yet to make a profit. In its prospectus filed with the Securities and Exchange Commission, Pandora reported a $16.8-million loss on $55.1 million in revenue for its fiscal year ended Jan. 31, 2010. From Feb. 1, 2010 through Oct. 31, Pandora narrowed its losses to $300,000 on $90.1 million in revenue. Because Pandora is largely a free service, only about 10% of its revenue came from subscriptions and other paid services. The vast majority of the company’s revenue came from advertising.

We’ve been through a long road to get here. This company should have been dead long ago. But now I can be more ambitious about what we can accomplish. It’s surreal.