Spotify, the music streaming service, is reportedly developing a U.S. Internet radio service to compete with Pandora, according to a Reuters report.
The report claimed the new service would launch before 2013 and would be ad-supported. It also said Spotify has already begun notifying music companies of their plans.
Spotify currently has over 10 million active users, well over 3 million subscribers globally and is growing rapidly. The company was recently valued at over $3.5 billion.
In March of this year, Pandora's number of active listeners grew to 51 million from the 32 million it had at the time of its IPO last June. The Internet radio service now streams over one billion listener hours per month, up 88% from 567 million listener hours a year earlier. On April 9, Pandora's stock hit an all-time low after an analyst's negative report but quickly rebounded after the company released figures showing listenership growth.
Spotify said it had "no announcement at this time."