Buy Facebook, Pandora on Mobile Dominance

Dominic Paschel, Pandora's vice president of corporate finance and investor relations, provided more details after the report in an email:

"Look at the chart in the eMarketer report where you see GOOG at 35.7% and with our disclosure of $100M, that puts us at 6.9% ahead of Apple (even discounting the fact that some of AAPL and GOOG's numbers likely include some of our remnant)."

Although Paschel might have painted an overly optimistic picture (though not by much), he gets the overarching theme correct. Pandora is perfectly positioned to be a leader in the mobile ad space going forward. Here's what I wrote at Seeking Alpha about how I see it playing out:

"eMarketer data show that Pandora captured roughly 6.9% of total mobile ad spending in 2011, which is the company's FY2012, minus one month. If Pandora owns just 7% of all mobile ad revenue in the U.S. in 2016, it will bring in $758.1 million four years from now. I expect that 7% number to actually be much higher."

A recent report from SNL Kagan supports a bullish view on Pandora's place in the mobile "upsurge." As the firm notes, if consensus exists on anything in digital media, it's that mobile is poised to explode, and Pandora should be able to better monetize its growing mobile listener base going forward.

As advertisers continue to warm to the idea of making digital audio part of their advertising campaigns, Pandora not only adds new customers, but keeps strong ties with existing ones. The company reports about an 80% renewal rate for current clients.

Although I expect Pandora to be a top five player (or thereabouts) in the mobile ad arena, I anticipate Facebook(FB) will take the No. 1 spot or come in a close second to Google(GOOG) .

As tech reporter Chris Ciaccia noted Monday, Facebook can dominate mobile. The numbers Ciaccia cites from a Sterne Agee analyst are nothing short of astonishing. Facebook is not a fad. It's a more-than-sustainable phenomenon.

It's easy to sound wise in hindsight; it's much more difficult to see the future when it is unfolding right in front of you. It's puzzling that we miss the future that we actively participate in shaping.