The co-founder and CEO of Pandora, under intensifying competitive pressure from Spotify and Apple Music, has relinquished his position and will step down from the company board as well.
Tim Westergren, who helped found the company 17 years ago, returned as CEO about 15 months ago with Pandora struggling to match the subscribers heading to rival services. He had also been CEO between 2002 and 2004.
After Westergren's return as CEO in March, the company launched a new $10 a month on-demand music service which lets users select the songs they want to hear, copying what Spotify and Apple Music already offers.
"Tim stepped in to be CEO at a critical time for the company and was quickly able to reset relations with the major labels, launch our on-demand service, reconstitute the management team and refortify our balance sheet by securing an investment from Sirius XM, said board member Tim Leiweke. "We support Tim's desire to identify a new CEO for Pandora's next stage."
But actions taken after Westergren's return may have been too little too late.
John Egbert, an analyst with Stifel Nicolaus, believes the company made some missteps that shifted its focus from the core of its business.
"During his time as CEO, Mr. Westergren did a commendable job repairing fractured relationships with the music industry enabling Pandora to strike direct licenses with labels so it could offer a full suite of ad-supported and subscription listening services, which we think are critical to the company's future," wrote Egbert. "Although we view the concessions Pandora made with the music industry as a necessary cost of building a potentially lucrative subscription business, in hindsight the company also took some major strategic missteps over past few years."
Pandora had 4.7 million paying subscribers at the end of March, while Spotify said it had more than 50 million.
Pandora and other streaming music services use algorithms to determine what listeners want to hear, based on the songs they like and do not like. Ads are played in the free version, but users can pay $5 per month to listen ad-free. Pandora makes most of its money from the free version, bringing in nearly $1.1 billion in ad revenue last year.
Pandora said Tuesday that Chief Financial Officer Naveen Chopra will serve as interim CEO as it looks for a permanent replacement. The company, based in Oakland, California, also said that Michael Herring has stepped down as president and that former MySpace and MTV Networks executive Jason Hirschhorn is joining Pandora's board. Westergren still holds 1.6 million shares in Pandora, less than 1 percent of total outstanding shares.
The executive shakeup comes a few weeks after Pandora made two moves to raise cash: It sold a 19 percent stake in its business to satellite radio company Sirius XM for $480 million and sold a ticket-selling business for $200 million.
Shares of Pandora Media Inc., which are already down 35 percent since the beginning of the year, slipped about 1 percent to $8.38 in midday trading.
Google Opens Its Defense In Antitrust Case Alleging Monopoly Over Online Ad Technology
Google opened its defense against allegations that it holds an illegal monopoly on online advertising technology Friday with witness testimony saying the industry is vastly more complex and competitive than portrayed by the federal government.
"The industry has been exceptionally fluid over the last 18 years," said Scott Sheffer, a vice president for global partnerships at Google, the company's first witness at its antitrust trial in federal court in Alexandria.
The Justice Department and a coalition of states contend that Google built and maintained an illegal monopoly over the technology that facilitates the buying and selling of online ads seen by consumers.
Google counters that the government's case improperly focuses on a narrow type of online ads — essentially the rectangular ones that appear on the top and on the right-hand side of a webpage. In its opening statement, Google's lawyers said the Supreme Court has warned judges against taking action when dealing with rapidly emerging technology like what Sheffer described because of the risk of error or unintended consequences.
Google says defining the market so narrowly ignores the competition it faces from social media companies, Amazon, streaming TV providers and others who offer advertisers the means to reach online consumers.
Justice Department lawyers called witnesses to testify for two weeks before resting their case Friday afternoon, detailing the ways that automated ad exchanges conduct auctions in a matter of milliseconds to determine which ads are placed in front of which consumers and how much they cost.
The department contends the auctions are finessed in subtle ways that benefit Google to the exclusion of would-be competitors and in ways that prevent... Read More