* Price, number of shares not revealed
* Reported $90 mln in rev over 3 quarters of FY11
* Morgan Stanley, JPMorgan, lead underwriters
(Adds analysts comment, details from filing, bylines)
By Gabriel Madway and Alina Selyukh
SAN FRANCISCO, Feb 11 Internet radio company
Pandora Media Inc filed to raise up to $100 million in an
initial public offering of common stock, becoming the latest
technology company to test the public markets.
Pandora, which runs an online service that allows users to
stream free music based on feedback from the listener, has 80
million registered users.
The company did not reveal the price range or the number of
shares it plans to sell in the IPO.
"Pandora has tremendous reach, and radio still monetizes
well in terms of the ability to capture people's attention,"
said BGC Partners analyst Colin Gillis.
According to a filing with the U.S. Securities and Exchange
Commission on Friday, Pandora had $55 million in revenue in
fiscal 2010, and $90 million through the first three quarters
The company posted a net loss of $16.8 million last year,
but its loss had shrunk to $328,000 through the first nine
months of 2011.
Pandora launched its service in 2005. The company said it
expects to incur annual operating losses at least through
Pandora has nearly doubled its marketing and sales spending
since 2008 and grew its content acquisition spending more than
five-fold, the filing showed.
The company, based in Oakland, California, makes money
primarily by selling advertising, although it also sells
Reuters had reported last month that Pandora was in talks
with bankers to go public. Daily deals website Groupon is also
considering an initial public offering. [ID:nN14114521]
The flurry in activity by Web companies may be a sign they
are eager to take advantage of high valuations being seen in
"You want to hit the window when the window is open,"
WEB IPO ACTIVITY
Demand Media DMD.N, an online company that relies on
freelance writers to churn out articles and video designed to
appear at the top of Internet searches, had a successful IPO
last month. It was seen as something of an icebreaker for
Internet-related deals this year. [ID:nN26131589]
Pandora has selected Morgan Stanley and J.P. Morgan as
leading underwriters for its offering.
The company said in the filing it would use part of its net
proceeds to pay dividends on convertible preferred stock that
would be converted into common stock after the IPO.
Pandora's main venture-capital investors -- Crosslink
Capital, Walden Venture Capital and Greylock Partners --
together own more than 50 percent of the company.
Tim Westergren, Pandora's founder, owns roughly 2 percent
of its shares.
The company's board members include Peter Chernin, former
chief operating officer of News Corp (NWSA.O), and Barry
McCarthy, former chief financial officer of Netflix (NFLX.O).
Pandora is different from other streaming music services
because it uses algorithms and the Music Genome project -- a
database built by teams of musicians that analyzes songs -- to
choose music for its users.
Start-up Spotify offers streamed access to millions of
music tracks, which consumers can also buy. The company has 10
million users in Europe and is expected to expand to the United
States soon. [ID:nLDE70C0W8]
(Reporting by Gabriel Madway in San Francisco, Alina Selyukh
in New York and Himank Sharma in Bangalore; Editing by Richard