Pandora and Facebook have more than a recent IPO in common. According to some analysts, the services share the common challenge of monetizing an increasingly mobile audience.
For Pandora, mobile monetization is one of its "major challenges," argues Forbes, "just like Facebook." Analysts from Canaccord -- for example -- expect "the widening gap" between mobile usage and revenue "could pose a serious risk," reports Forbes (here).
Facebook's mobile problem is essentially the same: fast growth, but little monetization.
In fact, an update to Facebook's IPO filing (here) states that the company "does not currently directly generate any meaningful revenue" from mobile users. That's especially troubling considering about 488 million users access Facebook's mobile services monthly, compared to a total 901 million monthly users. In other words, more than 54% of monthly users access Facebook via mobile devices.
Facebook's CFO David Ebersman said "mobile use of Facebook is critical to long-term user engagement," but argued mobile advertising is still in its early days and that there is little innovation (according to CNN, more here).
"This problem is not unique to Facebook," agreed Zoosk co-founder and co-CEO Sayan Zadeh. "No company — not even Google or Apple — has managed to figure out ad monetization on mobile to date."
Other analysts argue Pandora is figuring out how to monetize mobile users and that Facebook could benefit.
"We’re excited about continued progress on mobile monetization... It’s the highest percentage it has ever been," Pandora CEO Joe Kennedy said.
"If Facebook does manage to re-invent its mobile wheel and find a way to make its mobile platform profitable, expect much of the company’s inspiration to be gleaned from what Pandora has managed to achieve," comments WebProNews (here).
"Pandora's first-quarter 2013 results and conference call should help dispel myths and alleviate concerns over not only Pandora's ability to effectively monetize mobile usage, but Facebook's as well," writes The Street (here).
"Just as content providers could not ignore this phenomenon [of mobile], advertisers cannot stick with traditional channels if their target customer abandons them. So, simply put, if Pandora and Facebook users are overwhelmingly accessing the platforms via mobile environments, namely on smartphones, advertisers have little choice to make the migration."