MSN Discontinues Pandora

June 19, 2008 -- As quietly as it launched on Microsoft's site two years ago, internet radio service Pandora was discontinued from MSN around midnight Wednesday. Pandora remains on its own web site, and user settings are unaffected.

Pandora, which was the home page for radio.msn.com, was replaced by a message reading: "MSN Music has discontinued its radio service. Search for radio stations and related services."

Speculation on the decision ranges from a lack of Pandora revenue relative to RIAA royalties, to personal bias among Microsoft management. It is not believed to be Pandora's decision, however the online radio provider may have been too cautious about monetizing the audience with advertising.

Pandora shunned ZeroKlix, a disruptive ad format built for the high costs of streaming online radio. While Pandora recently increased the advertising on its site, the silent banner ad format was hardly noticeable.

Streamcasters and online publishers avoid disruptive advertising to maximize the audience, but they pay the price with having to sell cheap ads with low conversion ratios.

Pandora's service is considered legendary by some. A Seattle DJ and Pandora fan Aaron Walters said, "I don't know what it means for Pandora to lose Microsoft, but I guess I'll just change my bookmark."

In 2006, the Wall Street Journal reported, "Pandora's team of music analysts take songs apart, assigning values to as many as 400 musical nuances per song; the service then uses that information to compare songs and make recommendations."

Users can create multiple channels, skip songs, and vote them up or down. Royalties for allowing users to select exactly what songs to listen to would be cost prohibitive. For most broadcasters, bandwidth and royalty costs are already too high for profitability. But when one service turns off, another is likely to take its place.

In Spring 2008, it was reported Pandora had more than eight million registered listeners with 2.75 million unique visitors monthly and a database of over 400,000 songs.