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Pandora turns another corner – Westergren, Herring out. CEO search on. New board member in.


Reported yesterday and confirmed this morning, founder and CEO Tim Westergren has left Pandora. He steps down from the chief executive position, and exits the board of directors.

Also, less publicized but significant, President Mike Herring is leaving the company after four and a half years (part of which was as CFO). Chief Marketing Officer Nick Bartle is also leaving the scene.

Into the breach steps the current Chief Financial Officer Naveen Chopra as interim CEO. The board is launching a CEO search for a permanent top exec. Also, ex-MTV, ex-MySpace, ex-Sling Media exec Jason Hirschhorn is taking a board seat.

Tim Westergren co-founded Pandora as a music analysis technology project (The Music Genome Project) in 2000, and served a previous stint as CEO from 2002 to 2004. He took over again in March of last year, replacing Brian McAndrews.

“I am incredibly proud of the company we have built,” Westergren said. “We invented a whole new way of enjoying and discovering music and in doing so, forever changed the listening experience for millions.” Truer words never spoken.

Westergren’s second CEO tenure can be seen in retrospect as a 15-month transition from old Pandora to new Pandora. In a dramatic business model shift, the company built and launched a fully interactive on-demand music service to complement the market leading online radio platform. Re-fashioning the company required building new relationships with labels and publishers, a mountain to climb that Westergren was particularly suited for, having been a touring musician in his pre-Pandora days. The new model also puts Pandora squarely in competition with Spotify, the leading on-demand music service, at a time when subscription revenue is leading the nascent revival of the recorded music industry.

With all this, Pandora looks substantially different today than it did in January. The executive leadership, constitution of the board, bank account, and capital stakeholders sketch a different profile for Wall Street investors to consider. Twice in today’s announcement, in two quotes by board members, the company balance sheet was said to be “refortified” — a clearly chosen descriptor, and a good one. The main fortifications are a $480-million, 19% buy-in from Sirius XM, and the sale of Ticketfly for $200 — fixing an October, 2015 acquisition that didn’t make a mark in the Pandora product.

The stock bounced yesterday on the Tim-is-leaving rumor (not a warm and fuzzy moment for Westergren, one might guess), and is down a percent this morning.

 

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Brad Hill

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