October 3, 2018 / 12:46 PM / in 2 months

Online radio firm Pandora to handle U.S. advertising for SoundCloud

Oct 3 (Reuters) - Internet radio company Pandora Media Inc and music sharing service SoundCloud said on Wednesday that Pandora will take over handling the U.S. advertising for SoundCloud.

The deal, for which financial details were not disclosed, illustrates how Pandora - best known for its consumer-facing streaming music service - is gaining a revenue stream by selling its back-end advertising technology to others.

Last month, the Oakland, California-based company agreed to sell itself in a $3.5 billion all-stock deal to satellite radio company and part owner Sirius XM Holdings Inc.

Pandora, which competes against Spotify and Apple Inc's Apple Music, has long offered free versions of its streaming music service supported by advertising.

In recent years, it has been increasing its control over the back-end technology that lets advertisers place ads in front of targeted listeners, both on Pandora and elsewhere.

Earlier this year, Pandora bought AdsWizz, which makes such back-end systems, for $145 million. Before Pandora purchased it, AdsWizz was handling advertising placements for a broad group of streaming services, including Pandora rivals such as Spotify and Deezer.

Pandora has said it has the ability to place ads in about two-thirds of all digital audio inventory, making it the largest publisher of digital audio advertising in the United States.

SoundCloud is a privately-held company where new, unsigned artists post and share their work. It has become central to the rap and hip hop worlds, with prominent artists like Chance the Rapper using the service early in their careers.

Collectively, Pandora and SoundCloud say their services reach 100 million listeners in the United States. Worldwide, Spotify has 83 million subscribers and Apple Music has 50 million.

Reporting by Stephen Nellis in San Francisco, Editing by Rosalba O'Brien

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