Pandora in the Crosshairs as Apple Boosts iTunes Radio

As the online music world focuses on Apple’s acquisition of Beats Electronics, a series of new initiatives at Apple’s iTunes Radio service could also have a significant impact on the digital music business and especially the market leader, Pandora Media.

In a move that strikes at the heart of Pandora’s advertising business, iTunes Radio is expected to enable locally targeted advertising later this year, according to ad buyers who have spoken to Apple. Apple may begin promoting iTunes with “house ads” on its iAd mobile advertising network, an unusual move for the company.

Apple is also looking to work with erstwhile rivals—broadcast radio stations—in order to increase the volume of content on its service.