NEW YORK (CNNMoney) -- Internet radio site Pandora filed late Friday to raise up to $100 million in an initial public offering.
This offers the first public look at the company's finances -- and Pandora isn't yet profitable. The popular site posted a net loss of $328,000 on revenue of $90.1 million in the first nine months of its most recent fiscal year. In the fiscal year ended Jan. 31, 2010, it lost $16.8 million on sales of $55.2 million.
Its biggest expense is the royalties it pays for the music it streams. As Pandora's audience grows, so do those costs, which reached $45.4 million in the first nine months of 2010. That is twice what Pandora spent on them in the same period a year earlier.
And the Oakland, Calif.-based company's business is growing fast. As of last month, Pandora had 80 million registered members and was averaging a new one every second. Those members racked up 2.6 billion hours of listening to Pandora's song stream in nine-month stretch that ended Oct. 31.
Founded in 2000 as the Music Genome Project, Pandora uses algorithms and user feedback to generate music recommendations for its listeners.
The company claims a 50% share of all Internet radio listening time among the top 20 stations and networks in the United States, according to a November 2010 report by audience measurement firm Ando Media.
Pandora offers listeners two options: A free, advertising-supported stream or a "premium" plan priced at $36 per year, which offers higher audio quality and no ads.
The premium plan is a growing moneyspinner: It generated $12.3 million in the first nine months of 2010, up from just $2.6 million a year earlier. But advertising is by far Pandora's biggest revenue source. The site took in ad sales of $77.9 million in the first nine months of 2010, up from $28.7 million during the same timeframe a year earlier.
Pandora currently has 295 employees and a cash stash of $40.7 million. The site is backed by more than $55 million in venture capital from investors including Crosslink Capital, Greylock Partners, Hearst Interactive Media and Allen & Co.
Pandora founder Tim Westergren currently holds a 2.4% stake in the company he created nearly a decade ago. CEO Joseph Kennedy holds 2.7%. Both sold off some of their holdings to private investors last year in a tender offer priced at $3.138 per share of stock. Those sales netted $2.2 million for Westergren and $2.5 million for Kennedy.
Pandora is one of a growing number of tech companies looking to go public.
Online content creator Demand Media (DMD) raised $67 million last month in an IPO that valued the company at more than $1.5 billion. Business social network LinkedIn filed in late January for its IPO, revealing a profit of $10 million for the first nine months of 2010 on sales of $161 million.
Domino's has aggressively courted Millennial stomachs by upping its online game and allowing young people to order via texts and also tweets. The game plan has paid off. Half the company's U.S. sales are digital. More
Joseph Stiglitz, a Nobel prize-winning economist and adviser to Hillary Clinton tells CNN it's 'absolutely wrong' for President Obama to try to push through the Trans Pacific Partnership trade deal. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The government plans to buy 11 million pounds of cheese to help with the dairy surplus and help feed needy families. More