From the Panoramio blog post on May 31st:
The integration of photos from Panoramio in Google Earth has been so successful since John Hanke suggested it that we see the acquisition of Panoramio as a natural consequence. We have tightened our relationship with Google Earth more and more in recent months, and at the end we decided to walk one step further. After so much work together, honestly, we couldn’t imagine a better scenario than selling Panoramio to Google.
I'm very excited for the Panoramio team, and just as excited that the identity work for the project had a small part in helping the team get to the next level.
Congratulations guys! :-)