Pandora 2016 Annual Report Download - page 34

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able to successfully launch an on-demand service, if at all, and if we fail to launch an on-demand service or a new service is
unsuccessful, we will not realize the benefits of this acquisition.
We also may not achieve the anticipated benefits from any acquired business due to a number of factors, including:
• unanticipated costs or liabilities associated with the acquisition;
• incurrence of acquisition-related costs;
• diversion of management’s attention from other business concerns;
• regulatory uncertainties;
• harm to our existing business relationships with business partners and advertisers as a result of the acquisition;
• harm to our brand and reputation;
• the potential loss of key employees;
• use of resources that are needed in other parts of our business; and
• use of substantial portions of our available cash to consummate the acquisition.
In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill
and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not
yield expected returns, we may be required to take charges to our operating results based on this impairment assessment
process. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely
affect our operating results. In addition, if an acquired business fails to meet our expectations, our operating results, business
and financial condition may suffer.
Our ability to increase the number of our listeners will depend in part on our ability to establish and maintain relationships
with automakers, automotive suppliers and consumer electronics manufacturers with products that integrate our service.
€
A key element of our strategy to expand the reach of our service and increase the number of our listeners and listener
hours is to establish and maintain relationships with automakers, automotive suppliers and consumer electronics manufacturers
that integrate our service into and with their products. Working with certain third-party distribution partners, we currently offer
listeners the ability to access our service through a variety of consumer electronics products used in the home and devices
connected to or installed in automobiles. We intend to broaden our ability to reach additional listeners, and increase current
listener hours, through other platforms and partners over time, including through direct integration into connected cars.
However, product design cycles in automotive manufacturing are lengthy and the useful lives of automobiles in service is long,
and we may not be able to achieve our goals in our desired timeframe, which could adversely impact our ability to grow our
business.
Our existing agreements with partners in the automobile and consumer electronics industries generally do not obligate
those partners to offer our service in their products. In addition, some automobile manufacturers or their supplier partners may
terminate their agreements with us for convenience. Our business could be adversely affected if our automobile partners and
consumer electronics partners do not continue to provide access to our service or are unwilling to do so on terms acceptable to
us. If we are forced to amend the business terms of our distribution agreements as a result of competitive pressure, our ability to
maintain and expand the reach of our service and increase listener hours would be adversely affected, which would reduce our
revenue and harm our operating results.
We rely upon an agreement with DoubleClick, which is owned by Google, for delivering and monitoring most of our ads.
Failure to renew the agreement on favorable terms, or termination of the agreement, could adversely affect our business.
€
We use DoubleClick’s ad-serving platform to deliver and monitor most of the ads for our service. There can be no
assurance that our agreement with DoubleClick, which is owned by Google, will be extended or renewed upon expiration, that
we will be able to extend or renew our agreement with DoubleClick on terms and conditions favorable to us or that we could
identify another alternative vendor to take its place. Our agreement with DoubleClick also allows DoubleClick to terminate our
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