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Westergren keeps promise: Pandora profitable

The much-loved music-recommendation and online radio service sees a quarterly profit for first time. Now its goal is a full year of profit.

Pandora, the popular music recommendation and online radio service, said Tuesday that it has recorded its first quarterly profit and is now striving to be profitable for all of 2010.

Things are looking up for Pandora and founder Tim Westergren. CNET

"We became profitable for the fourth quarter of 2009, and now we're shooting for profits for the entire 2010 [period]," Tom Conrad, Pandora's chief technology officer, told GigaOm.

While Pandora has yet to reach profitability for a full year, breaking the barrier--even for a quarter--is an accomplishment for the ravaged digital music sector.

Among the so-called Web 2.0 digital music services that sprang up in the past few years, not only have most failed so far to reach profitability, a few have either shut down or were acquired.

Ruckus and SpiralFrog shut down. Imeem and iLike were acquired by MySpace at either a loss or no gain for investors. Even Lala, which was acquired by Apple, doesn't appear to have come close to profits.

Advertisers have appeared unwilling to spend big on digital music and I, like a lot of people, was skeptical about Pandora ever reaching the mark, even after its dauntless founder, Tim Westergren, predicted last spring the company would do it. (Come on, how many company executives say that?)

Pandora spent a decade struggling with a myriad of obstacles, but apparently Pandora and Westergren vaulted them all.

Besides the glut of competition that streamed into the sector in the latter half of the past decade and the advertiser apathy I already mentioned, Pandora also had to help lead an extended fight to reduce royalty rates paid by Web radio stations.