Madrona partner Brian McAndrews named new Pandora ECO

Joe Kennedy steps down as Pandora usage ramps up

Financial trends and news by Faith Merino
September 12, 2013
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Some six months after Pandora CEO Joe Kennedy announced his intention to step down, the company has named his replacement: Brian McAndrews.

McAndrews, who left Microsoft in 2008, will be Pandora’s new CEO, effective immediately, the company announced Wednesday evening.

Hailing from General Mills and ABC, McAndrews took over Seattle digital agency Avenue A in 1999. He built the company into digital advertising agency aQuantitative, which later sold to Microsoft for $6 billion in 2007. He took on the role of Senior Vice President of Microsoft until he left in 2008.

Since then, he’s been a managing partner at Madrona Venture Group, which specializes in early stage startups. He currently serves on the boards of The New York Times Co., Grubhub Seamless, and AppNexus.

Pandora founder and Chief Strategy Officer Tim Westergren says that the appointment is perfect because the company was specifically looking for someone with expertise in advertising and technology.

"We had very specific criteria for our new CEO, and we were very strategic about finding the right person," said Westergren, in a statement. "No one better understands the intersection of technology and advertising, which he clearly demonstrated during aQuantive's meteoric rise.”

McAndrews joins the company as is seeing a sharp uptick in listeners. The company now has 71.2 million active users, which is up 30% from last year. Pandora’s market share for total U.S. radio listening was 7.08%, up from 6.02% last year, while the company’s total listening hours grew 18% to 3.88 billion in the second quarter.

Listener hours are likely to increase as Pandora has removed its cap on free ad-based listening. Previously, users were limited to 40 hours of free listening before they were required to pay.

In the second quarter of 2013, Pandora generated $157.4 million in revenue, beating out Wall Street’s estimates of $156 million. Notably, the company’s second quarter revenue was up 55% over the same quarter last year. And mobile is accounting for an increasingly large chunk of that revenue. Non-GAAP mobile revenue grew 92% year-over-year to $116 million. (Non-GAAP revenue overall came in at $162 million.)

But it’s also seen its loss grow year-over-year. The company’s second quarter EPS came in at a loss of $0.04, while analysts were expecting a profit of $0.02 per share.

Pandora could potentially see rocky times ahead as Apple gears up to release iOS 7 later this month, which will include iRadio.

"On behalf of the entire board, we thank Joe for his tireless leadership. Joe is handing over a company that is strong and well-positioned for long-term growth,” said Robert Kavner, Pandora's Lead Independent Director, in a statement. 


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