Another hit out of Europe (Skype was from there) for sure, but more so one of the most relevant and useful tech companies of the past decade, Spotify, has all the buzz lately. And they deserve it. They’ve managed to create a radio meets iTunes client for online radio that everyone loves, myself included. There has always been different media players for consumers, but there hasn’t been one that lets you stream and listen to whatever song you want, for free in an iTunes like style, until Spotify.

I won’t rant on about how awesome Spotify is, instead, I’m making a bold statement and predicting that Google will acquire Spotify. Why? Well, there are many reasons and I will get to them, but my main thought is that Google will go head and head with iTunes, Google’s efforts combined with the boost of users Spotify already has, who have downloaded the desktop client, that will make them a big threat to Apple.

Aside from going head to head with Apple, there are other things that can benefit Google from acquiring Spotify, like their Google Music endeavors, a killer music experience for Android products and most interesting of all, tying Spotify in with Google+, particularly, the +points system.

I want to talk a little bit more about how Spotify is a huge threat to iTunes. If you think about it for a minute, iPod sales are on the downturn, that is mainly because people just use their Android or iPhone, as an mp3 player, that can do more than just play music. There is also a situation with the fact that each track generally costs $1.29 to buy on iTunes now, instead of $.99. In addition, people who buy more than 8 songs a month, are probably better off streaming the same music and more for $10/month with Spotify’s Premium plan. And the last point being that syncing will be irrelevant and people won’t need to deal with it if they stream their music, since their playlists are all available through one login on Spotify.

Now that we’ve established that Spotify is a threat, and a bigger threat to iTunes when Google acquires it, even though Spotify is not selling music and just streaming it, let me discuss why it will be a great move for Android.

Android is no doubt becoming more and more of a juggernaut, with 550,000 activations per day. But the Spotify experience seamlessly integrated with all Android phones and tablets? Now that’ll be a bigger scare for Apple. It’s kind of like Netflix, but 100x better because all of the new music available on iTunes is on Spotify, unlike Netflix where there is just junk for streaming (for the most part).

The combination of social (Google+) with a music streaming service like Spotify, will probably give Facebook a tough time. If Google makes all the playlists users have available in Google+, that would drive more people to be social for a longer amount of time, since their music is playing and it helps them waste more time through the day being non-productive (only kidding, but you know it’s true— how many people are on Facebook at work instead of actually working). The possibilities are endless, from people discussing their music to sharing, maybe even having a Google+ date with elegant music playing in the background (why not? It’s the digital age).

In fact, the whole acquisition could be expressed as an integration play. Integrate the Spotify service into every Android device natively. Integrate it into Google+. Plus it being on the desktop, would give Google a desktop presence and in turn they could integrate Google+ into Spotify’s desktop client, allowing users to surf their Google+ service on the client itself.

Obviously acquiring Spotify wouldn’t be cheap for Google, given Spotify’s raised about $150M and about 33.2M Euros, but with Google revenues around $9B for quarter 2/2011, it doesn’t seem that difficult.

Now there is a reason I didn’t predict Microsoft or Facebook would acquire Spotify for two reasons.

First, Microsoft wouldn’t acquire them because they are still probably working on integration of Skype, but more so because they are focused on other things like trying to eat Google’s lunch, with Bing and trying to 1 up Apple OS X with Windows 8.

Facebook simply does not have the cash to acquire a service like Spotify since it is not public, and while I’m sure they would throw in a bid during an auction, they won’t be the highest bidder, that said, you never know if Microsoft will pull another Skype and outbid Facebook and Google and just pick up Spotify so their competitors can’t have it. But if we start thinking like that Apple has been sitting on a pile of cash for years and hasn’t made many acquisitions and Spotify would assure their stability in the ecosystem for a little while, but I’m sure in that case the anti-trust brigade would come knocking.

People might say they’d still rather download music because of data caps on their cellular carriers data plans, etc, but the fact is that WiFi is available in many places than not, so that doesn’t seem like a big issue, more so because if you download more than 50 songs a month, it is still cheaper to pay for Spotify Premium, additional bandwidth for data on some carriers and still come out ahead. And if you can use Google Rewards like +points for a service like Spotify, I don’t see it doing anything but destroying Apple’s iTunes business. All in all I believe Apple has done a great thing and made everything digital for the world, but Google will make it’s move and it will be staggering.

P.S. It is good to note that Google has had discussions with Spotify in the past, offering $1B to acquire the company, but the issue was that the contracts Spotify has with the major music labels, would be renegotiated if the service is acquired, which throws a curveball for whoever is acquiring the service. So why will Google circle back in the future? Because Spotify will be able to grow under its current conditions to desktops (and mobile devices) around the world, and once there is a surety of number of users, the risk will be less, even if the service ends up costing the acquirer more money.