Pandora's Profit Margin is Awfully Small

Karsten Strauss, writing for Forbes about Pandora's CEO stepping down:

The company announced late last year it had generated about $120 million in 2012, with profits of just over $2 million. Though 60 % higher than the year prior, the figure fell short of what analysts had predicted.

That calculates out to be roughly 1.67 % profit. Such a slim profit margin has to be a concern to investors. With the specter of current competitors (Spotify, Rdio, Amazon) and potential competitors (Google, Apple) looming, it will be tough for Pandora to continue existing as a company.