We're streaming a lot of music these days.

Shares of market leader Pandora Media (P) soared 12% on Thursday after posting better-than-expected quarterly results.

Sure, the music discovery giant did post a loss for the period. Applauding red ink feels a lot like asking for an encore at a concert where the band forgot to tune the instruments. Pandora also posted a slight dip in revenue sequentially, meaning that revenue during the fiscal quarter ending in April was just below what it cranked out during the three prior months of the holiday quarter before that. If a band follows up a platinum album release with one that only goes gold, it's not exactly a good sign.

However, it's still all about expectations and where a company lands relative to those targets.

Cracking Open Pandora's Box

Revenue during the company's fiscal first quarter clocked in at $80.8 million, 58% ahead of where it was during the same period a year earlier. The showing may have been less than the $81.3 million that Pandora reported during the holiday-boosted fiscal fourth quarter, but it was comfortably ahead of the guidance calling for $72 million to $75 million in revenue that it had issued back in March.

Pandora's adjusted deficit of $0.09 a share during the quarter doesn't seem so bad when you consider that analysts -- and the company itself -- were expecting to lose twice as much money during the quarter.

It's really in the popularity metrics where the Pandora story really starts to resonate.

There are now 51.9 million active users of the service where simply providing the name of a musical artist, genre, or song can launch a customized music experience of similar tracks. Pandora's now serving more than a billion listener hours a month, 92% ahead of where it was a year earlier.

When you pit Pandora against traditional radio stations in the country, Pandora's share of that listening has climbed from 3.11% a year ago to 5.95% today.

The boom in smartphones finds Pandora at the forefront of a revolution in the way that we consume music. Imagine the throwback Walkman, in your phone, with a never-ending music library -- for free. There are many people that pay for a premium version that strips away ads, but most of Pandora's users have no problem putting up with the occasional ads for the personalized streaming experience.

Pandora has also redefined the driving experience. Roughly two dozen carmakers now make it practically seamless for smartphone owners to stream Pandora through their car speakers via Bluetooth connectivity.

Beyond the market leader

It's easy to see why Pandora dominates this niche. Line up the 20 largest U.S. Internet radio service providers and Pandora's slice of the market is a whopping 71.7%. However, there are plenty of other platforms that are starting to gain traction.

• Reports this month indicated that overseas darling Spotify -- where listeners pick the exact tracks that they want to hear -- was in the process of raising money at a level that values the international music service at a whopping $4 billion. Spotify was introduced in the U.S. last year.
• Clear Channel's (CCMO.PK) iHeartRadio announced late last week that it has landed 10 million registered listeners since relaunching the online radio service in the fall. Clear Channel may own hundreds of traditional AM and FM stations, but even it sees the power of streaming.
• Sirius XM Radio (SIRI) may have more than 22 million subscribers, but the satellite radio service is also making sure that it beefs up its streaming offering. New receivers and its new Sirius XM 2.0 platform broaden the number of available channels, paving the way for a personalized music service of its own.

The Spirit of Internet Radio

Pandora may be exploding in popularity now, but it's been around for a long time. The service was introduced a dozen years ago solely as a desktop platform. Pandora's Music Genome Project would break down a catalog of music to identify similar traits in matching tunes to visitor tastes.

It was a well-received project for PC users, but the mobile revolution is what really took Pandora to the next level.

Things aren't perfect. Less than 13% of its revenue is coming for premium subscribers. It would be nice to see that market grow. There's also the fear that wireless carriers moving to usage-based pricing instead of unlimited data will curb the allure of streaming chunky media files. Last year's IPO buyers will also be quick to point out that the stock is still well below last year's $16 IPO price.

This may all be true, but the metrics don't lie. Internet radio in general and Pandora in particular are booming right now.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article.

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By MARCIA DUNN, AP Aerospace Writer

The privately bankrolled Dragon capsule arrived at the International Space Station for a historic docking Friday, captured by astronauts wielding a giant robot arm.

It succeeded in making the first commercial delivery into the cosmos.

U.S. astronaut Donald Pettit used the space station's 58-foot robot arm to snare the gleaming white Dragon after a few hours of extra checks and maneuvers. The two vessels came together while sailing above Australia.

"Looks like we've got us a dragon by the tail," Pettit announced from 250 miles up once he locked onto Dragon's docking mechanism.

"You've made a lot of folks happy down here over in Hawthorne and right here in Houston," radioed NASA's Mission Control. "Great job guys."

NASA controllers clapped as their counterparts at SpaceX's control center in Hawthorne, Calif. -- including SpaceX's billionaire maestro, Elon Musk, of PayPal fame -- lifted their arms in triumph and jumped out of their seats to exchange high fives.

This is the first time a private company has attempted to send a vessel to the space station, an achievement previously reserved for a small, elite group of government agencies. And it's the first U.S. craft to visit the station since the final shuttle flight last July.

The astronauts wasted no time getting the Dragon capsule into position for actual docking to the space station. The unmanned capsule is carrying 1,000 pounds of supplies on this unprecedented test flight.

On Thursday, the capsule came within 1½ miles of the space station in a practice fly-by. It returned to the neighborhood early Friday so Pettit, along with Dutch astronaut Andre Kuipers could capture it with a robot arm. First, the capsule went through a series of stop-and-go demonstrations to prove it was under good operating control.

NASA ordered extra checks of the Dragon's imaging systems as the capsule drew ever closer to the space station, putting the entire operation slightly behind schedule. At one point, SpaceX controllers ordered a retreat because of a problem with on-board tracking sensors.

Given that the Dragon is a brand new type of vehicle and this is a test flight, the space agency insisted on proceeding cautiously. A collision at orbital speed -- 17,500 mph -- could prove disastrous for the space station.

SpaceX -- officially known as Space Exploration Technologies Corp. -- is one of several companies vying for the chance to launch Americans from U.S. soil. That ability ended with NASA's final shuttle flight last summer. To get to the space station, NASA astronauts must go through Russia, an expensive and embarrassing situation for the U.S. after a half-century of orbital self-sufficiency.

President Barack Obama is pushing commercial ventures in orbit so NASA can concentrate on grander destinations like asteroids and Mars. Once companies master supply runs, they hope to tackle astronaut ferry runs.

Musk, who founded SpaceX a decade ago and helped create PayPal, said he can have astronauts riding his Dragon capsules to orbit in three or four years. His Falcon 9 rockets lift off from Cape Canaveral, Fla.

The space station has been relying on Russian, Japanese and European cargo ships for supplies ever since the shuttles retired. None of those, however, can bring anything of value back; they're simply loaded with trash and burn up in the atmosphere.

By contrast, the Dragon is designed to safely re-enter the atmosphere, parachuting into the ocean like the Mercury, Gemini and Apollo capsules did back in the 1960s. Assuming all goes well Friday, the space station's six-man crew will release the Dragon next Thursday after filling it with science experiments and equipment.

___

Online:

SpaceX: www.spacex.com

NASA: www.nasa.gov/offices/c3po/home/

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Searching for Clues

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It's getting harder for Dell (DELL) to think outside of the box.

Shares of the PC maker opened sharply lower on Wednesday after posting disappointing financial results. For the fiscal quarter that ended earlier this month, earnings tumbled 33% on a 4% decline in revenue.

You don't need to dig deeper than that into Dell's income statement to know that sales are soft and margins are contracting.

It also doesn't help that Dell's outlook for the new quarter is equally uninspiring. By pointing out that results will be in line with "historical seasonal trends" in climbing 2% to 4% sequentially, Dell's saying that the first quarter wasn't a fluke.
"We need to execute better," Dell's CFO said about the report.

Oh, I think Dell's doing a pretty good job of executing itself.

The People Have Spoken

Some segments at Dell are showing signs of life, but the company can't escape the sharp 12% plunge in its consumer business.

This may be just a fifth of the company's business, but Dell has fallen a long way since the "you're getting a Dell, dude" ads were popular.

A lot of this is simply the handiwork of the public migrating to "good enough" computing devices. Folks don't need to fire up their desktops whenever they want to fire off an email, surf the Web, or stream video. Smartphones and tablets will do the trick, and those are two categories that are growing at a time when PC sales have been stagnant.

Dell was slow to embrace the netbook craze two years ago, and it's just out of touch when it comes to mobile devices and tablet computers.

The company's trying, but it's just not the same kind of force that it is in business-facing computers.

A Laggard Among Laggards

Dell isn't making the most of a bad situation. It's actually losing market share to rival Hewlett-Packard (HPQ) and market darling Apple (AAPL), and it's not as if things are going so well at HP given the tens of thousands of layoffs that are looming there.

Investors knew that Dell was going to disappoint when industry tracker Gartner rolled out its latest quarterly read of PC sales in this country a few weeks ago.

Gartner estimates that 15.5 million PCs shipped during the quarter, a 3.5% decline from the first three months of last year. Worldwide PC shipments did inch 1.9% higher, but it seems as if Dell hasn't been invited to that turnaround party.

Let's take a closer look at the market share changes over the past year in this country.

	2012 Q1 Mkt. Share	2011 Q1 Mkt. Share	Unit Growth
HP	29.0%	26.2%	6.6%
Dell	22.3%	22.3%	(3.6%)
Apple	10.6%	9.8%	3.8%
Acer	9.1%	11.9%	(25.9%)
Toshiba	8.7%	10.4%	(19.2%)

Source: Gartner.

Yes, Dell is still in full possession of its silver medal. It's not hurting as badly as laptop-centric Acer and Toshiba. Even Apple posted a 1% decline in MacBook revenue in its latest quarter.

However, something's just not right at Dell.

The Turning Point

A dozen years ago, Dell was hailed as a model worth following. Leading companies in different industries would tour the Dell campus to see how it nailed the direct-selling business that began all the way back to Michael Dell assembling desktops in his University of Texas dorm room.

Even as Asian companies emerged with manufacturing cost advantages, Dell stood strong.

However, in a move to improve its expenses, Dell opened a call center in Bangalore in 2001. Dell went on to expand its tech support outsourcing with other call centers in India, and that's when customers began complaining. Whether the knocks of scripted responses or communication difficulties were fair, Dell was no longer perceived as an American role model.

Dell temporarily retreated out of India a couple of years later, but the costs of handling all of its tech support closer to home proved to be unwieldy. It was also around this time that Dell dumped Ben "Steve the Dell Dude" Curtis after he was arrested for attempting to buy pot in New York City.

Nothing seems to have gone Dell's way since.

Dell's Bells

Dell was able to achieve some savings through cost cuts a couple of years ago, but there's only so much more expense shaving that Dell can do now.

Following HP into making model-widening acquisitions and taking a page out of the IBM (IBM) playbook by throwing its hat into the ring of high-margin business services are just temporary solutions. Dell has a problem, and it's in the box.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of International Business Machines and Apple. Motley Fool newsletter services have recommended buying shares of Dell and Apple, and creating a bull call spread position in Apple.

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Gallery: 9 Scary Ways Criminals Use Facebook

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Gallery: 5 Companies Getting Burned By Facebook

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Size isn't everything when it comes to tablets, but Amazon.com (AMZN) is apparently hoping to make that point moot.

DigiTimes -- the Taiwanese tech publication that's a hotbed of supplier rumors -- is reporting that Amazon plans to supersize its Kindle Fire soon.

The 7-inch model that has attracted millions of buyers with its entry-level $199 price isn't going away anytime soon. Sources simply tell DigiTimes that a second Kindle Fire tablet -- this one with a 10.1-inch screen -- may hit the market as soon as the third quarter.

In other words, the tablet wars are about to get even more interesting.

Tailoring the Tablets

An earlier rumor had Amazon working on an 8.9-inch version of the Kindle Fire that it introduced in November. That move wouldn't have made a lot of sense. Apple's (AAPL) iPad is a 9.7-inch tablet. If Amazon felt that it was losing sales to the iPad because the original Kindle Fire is too small, making it less small isn't the ideal solution.

Going slightly bigger is a smarter call, giving Amazon the flexibility to price its bigger tablet in the $299 neighborhood -- a price point that would still be very competitive with the iPad.

It's still easy to be skeptical. A tablet, after all, can be too big. If it's too bulky -- awkward to move around or just uncomfortable to hold -- it's going to be a problem.

Ignoring Steve Jobs

Apple surely didn't arrive at 9.7 inches by accident, and Steve Jobs used to mock smaller tablets as "tweeners" because they were too big to be a smartphone but too small to be a functional tablet.

Consumers don't necessarily agree. Amazon hasn't had a problem selling its Kindle Fire tablets, though the company has yet to reveal the actual number of units sold beyond CEO Jeff Bezos pointing out that "millions" were sold over the holidays.
Clearly there's a market for the 7-inch tablets that fit comfortably in a small pocketbook and perhaps even rather large cargo pockets. Barnes & Noble's (BKS) Nook Tablet and Research In Motion's (RIMM) PlayBook are also 7-inch devices.

However, at a time when it seems as if Apple may be going for a bigger screen for its next iPhone -- possibly testing Jobs' own "tweener" definition -- it's worth noting that Amazon also isn't afraid to grow its Kindle Fire business.

Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Amazon.com and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Amazon.com. Motley Fool newsletter services have recommended writing puts on Barnes & Noble and creating a bull call spread position in Apple.

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• There are 72 hours of video uploaded to the website every minute.
• YouTube receives 800 million unique visitors a month, who consume 3 billion hours of clips.
• There are now tens of millions of channels, and subscriptions to the content channels have increased 50% over the past year.

• Put out a tip jar: Google has tried to compete with eBay's (EBAY) PayPal as a transactional platform with Google Checkout, but it has a long way to go. One thing it could do is incorporate virtual tip jars on YouTube channels. Getting interested content creators to sign up for Google Checkout accounts and encouraging viewers to contribute would go a long way toward popularizing the platform.
• Kick things up Kickstarter style: Kickstarter.com is a fast-growing website that allows entrepreneurs and artists to raise money for projects. It's the poster child of "crowd funding" where visitors vote with their pocketbooks on what they want to see materialize and receive perks for financials participation. YouTube has launched its own funding efforts to nab proprietary content, but it needs to reverse the process and let viewers interact with compelling projects.
• Get more action from ads: Google rocks in paid search. It's a beast in sizing up text on website pages and serving up contextual ads that are relevant. It's harder to pull that off on an eye-candy platform. Google could be serving up better ads if it got to know its video content a little better. YouTube needs to encourage more descriptive text -- whether this is a matter of easier integration with its own Blogger, educating partners on the power of accurate words, or staffing a fleet of compensated reviewers for high-traffic clips. It's understandable why YouTube just doesn't flip the switch and let every channel owner generate click-based revenue. Gaming the system and the uploading of unauthorized content are big enough problems already. (The last thing that YouTube needs is to pursue monetization at the expense of the credibility of Google's ad platform.) However, YouTube can do a better job of working with cost-per-action ads where advertisers only pay if something is actually sold or a lead is genuinely created.

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• Invented PayPal (and sold it to eBay (EBAY) for $1.5 billion).
• Looked under the hood of the electric car that General Motors (GM) had just killed, and brought it back to life.
• Launched the first ever private space vessel to orbit the Earth.
• Was the inspiration behind the movie version of Iron Man's billionaire inventor Tony Stark.

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The leading daily deals website is ready for its prime-time close-up.

CBS (CBS) is picking up Friend Me, a sitcom about two friends who move to Los Angeles to work for Groupon (GRPN).

CBS has yet to reveal where it's slotting the shows that it's been picking up for the upcoming fall season, though this seems like a no-brainer to pair up with The Big Bang Theory. It could be an hour of nerds and geeks if CBS positions the series correctly.

Friend Me stars Christopher Mintz-Plasse, the actor who relishes playing awkward characters including the unforgettable McLovin in Superbad.

You Can't Buy This Kind of Publicity

Having the two lead characters work at the Los Angeles office of the Chicago-based Groupon is obviously validation for the flash-sale site. Even if the show mines the company's hokey ad copy or some of its more outlandish discounted offers for comedy, Groupon wins.

CBS could've just made up a company. It would have been an easy route, giving the broadcaster the ability to lampoon away without any legal repercussions. CBS also could've gone for a smaller rival. You just know that LivingSocial would've loved to take Groupon's place here.

However, Groupon is the brand that everyone associates with these half-priced pre-paid vouchers for restaurants, spas, service providers, and touristy experiences.

"I have a Groupon," is what patrons often say at an establishment, even if the voucher that they may be holding is from a rival daily deals provider.

Name Blame

But why is a series based on Groupon named after a Facebook friend request? Vanity Fair has already taken CBS to task over it. "This makes no sense and begs an immediate title change," the magazine's website argues.

However, it does stand to reason that the two main characters are creatures of social media. One is an introvert who prefers to spend his idle time back home playing online poker. Zynga (ZNGA) -- a powerhouse on Facebook -- does have an online poker game, though it's not played for real money.

Facebook faux pas or not, Groupon's going to be the real winner in Friend Me, even if the seemingly iffy premise doesn't necessarily bode well for those banking on a long tenure at CBS.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks mentioned in this article.

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General Motors (GM) really knows how to time an exit.

The automaker has announced that it will no longer advertise on Facebook, just days before the social networking giant is set to go public.

GM doesn't have a beef with the content on Facebook. It's just not satisfied with the effectiveness of the paid ads that it's been placing on the wildly popular website.

Maybe that's not a surprise: When's the last time you clicked on a Facebook ad?

Search marketing manager WordStream compared the click-through rates at Facebook to Google (GOOG). It discovered that just 0.051% of Facebook ads -- or 1 in every 2,000 impressions -- received clicks for advertisers.

By nature, folks don't like clicking on ads. Even on Google.com, where visitors are there expressly to be taken somewhere else, users prefer the organic search results over the sponsored entries. WordStream found that Google ads generate a click-through rate of 0.4%, or 1 in every 250 impressions.

Is Facebook too good at what it does? Are its more than 900 million active users so addicted to the platform that they don't want to click on an ad that will take them away from what they're doing?

Taking a Free Ride

GM isn't giving up on Facebook as a promotional platform. It will continue to milk the social-viral nature of the website, reaching out to visitors of its official fan pages and those who have GM and its cars in their Facebook news feeds.

It makes sense. Why buy the cow when you can milk it virtually for free? However, Facebook isn't going to look too kindly at this practice if more large corporate customers follow suit.

Facebook will never make individuals pay to use its site, but we may eventually reach a point where the social networking behemoth installs a pay-to-play requirement for corporate accounts. Why should a company be able to set up a fan page, reach an audience whose members choose to follow it, and not pay Facebook for the leads and the perpetual contact?

Better Ads

There's a better solution, of course. Facebook can just improve the monetization of its page views. Improving its ad-targeting technology to make sure that sponsored messages are reaching more receptive audiences is one place to start.

Facebook will also benefit as local advertisers grow to the point where they can muscle out national marketers. Users are more likely to click ads by area venues and service providers that will be more relevant and realistic.

Obviously Facebook is just starting to cash in on its gargantuan traffic. GM may be peeling out in a very public manner -- at a lousy time for Facebook -- but it's the social networking giant that's probably having the last laugh.

After all, in just eight years Facebook has achieved a market valuation that is three times greater than what GM has amassed in more than 100 years.

Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of General Motors and Google.

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By Jim Edwards

"GM has pulled its $10 million advertising campaign from Facebook. Why? The ads didn't work."

GM, started to re-evaluate its Facebook strategy earlier this year after its marketing team began to question the effectiveness of the ads. GM marketing executives, including Mr. Ewanick, met with Facebook managers to address concerns about the site's effectiveness and left unconvinced advertising on the website made sense, according to people familiar with GM's thinking.

More from Business Insider

• Groupon's Q1 Numbers Contain A $60 Million Timebomb
• 9 Advertisers Who Should Fix Their Lousy Facebook Timelines Immediately
• Facebook IPO Countdown: Here's What You Don't Know About Its $1 Billion Ad Business

• Facebook: 0.051%
• Google: 0.4%
• Average: 0.1%

Gallery: Facebook - A Timeline

See Also:

Data: Google Totally Blows Away Facebook On Ad Performance

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Amazon.com (AMZN) turned heads last year with its economically priced tablet, but necks are apparently stiffening up these days.

Tech tracker IDC is reporting that Amazon sold just 750,000 of its $199 Kindle Fire tablets during the first three months of the year, well off the 4.8 million units that it sold during last year's fourth quarter.

There are plenty of perfectly good explanations that account for part of the slide.

• Of course sales will fall sequentially in the first quarter. Tablets are hot sellers during the holiday shopping season.
• Amazon introduced the Kindle Fire in November, so it received a lot of media attention at the time.
• Apple (AAPL) rolled out the new iPad in March, stealing media coverage.
• Along with the new iPad's launch, Apple decided to continue selling the entry-level model of the iPad 2 at a $100 discount to the original $499 price.

All four factors definitely weighed down Amazon's momentum earlier this year, but things are more grim than even the explanations suggest.

Take Two Tablets and Call Me in the Mourning

Did tablet sales slip after the holidays? Absolutely. Apple sold 15.4 million iPads during the final three months of 2011, only to sell just 11.8 million iPads during the first three months of 2012.

However, the 23% sequential slide is mild compared to Amazon's 84% decline for the Kindle Fire.

IDC claims that the seasonal slowdown resulted in a 38% drop in worldwide media tablet shipments. Why did Amazon fare so badly? Apple actually increased its share of market this past quarter, while Amazon went from 17% during the holidays to 4% now.

Amazon did garner plenty of media coverage and hype during the mid-November debut of its tablet, but that also means that it only had half a quarter of market availability.

Apple's decision to shave the price of the iPad 2 to $399 in March played a part, but that still leaves us to wonder what went wrong in January and February, before consumers knew about the cheaper iPad 2s.

Besides, even with the lower price of the iPad 2, it still costs twice as much as a Kindle Fire.

A Moving Target

All those "Apple did this" and "Apple did that" excuses for the Fire's softening sales don't explain everything.

While Amazon was the undisputed distant silver medalist during the fourth quarter, Samsung passed it up for second place this past quarter. Amazon is now being fitted for a bronze medal, with Lenovo and Barnes & Noble's (BKS) Nook Tablet not too far behind.

Things may get hairier. Target (TGT) -- the cheap-chic department store chain -- will stop selling the Kindle Fire this month. Target may have thought that stocking the cheap tablets would be a good way to increase its sales in consumer electronics, but ultimately the chain realizes that it doesn't want to arm a rival that has an ecosystem in place to replace Target's DVDs, CDs, video games, and books with digital editions that Amazon delivers directly.

If other retailers follow Target's lead, Amazon will be back to relying on pushing its proprietary products on its website's landing page.

Fire Sale

"We expect a new, larger-screened device from Amazon at a typically aggressive price point," IDC predicts, echoing what many analysts believe will happen. The seven-inch Kindle Fire may soon have a larger sibling to match the 9.7-inch iPad, and obviously it will sell for a lot less than Apple's market-defining tablet.

Maybe that will help, but it obviously won't be enough to close the gap with Apple. As makers of Android-fueled tablets try to battle it out on price, Apple's pedigree and developer-rich App Store make it the runaway champion.

If Amazon and other tablet makers let Apple be the one to replace textbooks with e-readers in the classroom, the battle will be over. And it won't just be Amazon licking its wounds as it wonders why the Kindle Fire never set the world ablaze the way it had originally wanted.

Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Amazon.com and Apple. Motley Fool newsletter services have recommended buying shares of Amazon.com and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple and writing puts on Barnes & Noble.

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