Spotify and Google teaming up as iTunes competitor for Android 2.1?This article contains unofficial information.
The application is currently available in Europe and allows for offline syncing of music. Google envisions the service as a way to compete with iTunes. That is why Google was willing to cover the $3-$4 monthly cost per user that the record labels were seeking from Spotify for a U.S. presence. Spotify would sell ads on the service-like they do in Europe, but would still need Google's money to get the deal done. Overseas, users pay for Spotify Premium to access the mobile version of the service.
While no one knows if the deal was completed, Tech Crunch says that its sources have said that there is no deal for now. If an agreement does get struck, the site says its connects tell them to expect a new version of the service that includes a way to connect with the social networks to share and discover new music with your friends. Spotify lets you play music from your hard drive (like tunes you downloaded from iTunes) even if the songs are not in their library. This allows Spotify to fill in the gaps in their music library and allows you to build a huge collection of songs. But we might be jumping the gun. If the Nexus One is launched tomorrow, we might have some more answers about this whole thing.