Pandora names former Microsoft executive as new CEO

Brian McAndrews, a partner at Madrona Venture Group, is Pandora's new CEO, the company announced Wednesday.

The change is effective immediately. McAndrews, who previously was a top marketing and advertising executive with Microsoft and aQuantive will succeed Joe Kennedy. Kennedy announced in March that he was quitting after nearly a decade at the helm of Pandora.

The choice reflects the importance of advertising for Pandora.

"We had very specific criteria for our new CEO, and we were very strategic about finding the right person -- Brian is that person," Tim Westergren, Pandora's founder and chief strategy officer, said in a press release. "No one better understands the intersection of technology and advertising, which he clearly demonstrated during aQuantive's meteoric rise."

McAndrews was CEO of digital marketing company aQuantive until 2007, when Microsoft bought the company for $6 billion. He then went on to serve as a senior vice president at Microsoft until 2008. But in 2012 Microsoft had to write off most of the money used to purchase aQuantive because it "did not accelerate growth to the degree anticipated."

Although Pandora dominates in music streaming, with about 72 million active users and more than 200 million registered users, it's under pressure to perform. The music streaming and discovery space is heating up, and competition comes in the form of Apple's much buzzed about iRadio, Google Music All Access, and even a music discovery tool from Twitter.

Update, 2:16 p.m. PT: Added more background information.