Pandora has built a very cool app for discovering new music, based on their music-genre categorization technology. It's obvious that they are Flickr-type acquisition target.
Google should end up buying them. They'd be a great fit since Pandora has a unique technology in an area where Google is not already proficient. Unlike Kozoru, a search technology in an area that Google would rather develop in-house, Pandora adds something to the Google arsenal that Google isn't already trying to build.
Google could use Pandora as a base to take on iTunes, if they wanted to.