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Pandora, Amazon: Sister Success Stories

Written by: Rocco Pendola 04/20/12 - 8:12 AM EDT
Tickers in this article: AMZN P
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- People tell me I am crazy all of the time. They chide me for being a Toronto Maple Leafs fan. They do not understand how I can eat sardines straight out of the tin. More than a few folks brand me insane for being long Pandora(P) and bullish Amazon.com(AMZN) . In a couple of articles that hit TheStreet this week, I outlined my long-term bull case for both stocks. In one of the articles, I scratched the surface on similarities between Pandora and Amazon:

Big spending now sacrifices the bottom line in the near term at both companies, while keeping focus on massive long-term opportunity.

Both companies can dominate multiple spaces years from now, but only if they make the investment today.

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Pandora not only invests in content, but it is spending aggressively to assemble a sales team that can ramp up revenue by meeting demand for targeted, multiplatform advertising.

Amazon.com spends money on content and fulfillment and reportedly takes a loss on Kindle Fire with tunnel vision towards becoming an even more pervasive force in various aspects of consumers' lives.

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Both companies have been around for some time. Pandora since 2000; Amazon.com since 1994 (the company went online in 1995). Of course, Amazon has been a public company much longer. It went public in 1997, while Pandora only IPO'd last year. Despite their relative old age, both companies have seen their business models shift with the times and their founders' visions of the future. In the spirit of a Jobsian Apple(AAPL) , you can accurately call Pandora and Amazon "perpetual startups."