Apple's (Nasdaq: AAPL) inevitable entry into Internet radio may be the best thing for Pandora (NYSE: P) shareholders.

Shares of the music discovery website operator moved higher today, after a Bloomberg article speculated that Pandora may become a heavily courted buyout target if Apple goes through with a streaming service.

Wait? Didn't Pandora's stock take a beating two weeks ago when it was originally reported that Apple was negotiating with its record label partners for the licensing rights that would allow it to break into the booming streaming market?

That certainly did happen, but now Bloomberg is playing a little game theory. If Apple suddenly throws its hat into the Internet radio ring, doesn't it mean that Google (Nasdaq: GOOG) and (Nasdaq: AMZN) may soon follow suit? Neither of the three tech giants presently have a streaming service, though they all sell digital downloads of music. They're copycats. If Apple starts streaming customized radio, what do you think Google and Amazon will do?

And if Apple's going to be looking up at Pandora for at least a couple of years in music discovery, doesn't it make sense for another company to buy Pandora, so that it can be the one looking down at Apple?

Streaming out loud
Bloomberg turns to analysts at Albert Fried & Co. and Needham & Co., who suggest Pandora buyout prices of $20 and $14, respectively.

Pandora is trading well below either of those targets, and the premium may seem even juicier if the stock takes another hit once Apple finally rolls out its service. Apple will. Digital music sales are starting to slow, and Apple has to realize that streaming music is the way that many listeners are choosing to take in their tunes these days.

It would also be understandable if Pandora balks at any offer close to the $14 that Needham is suggesting. Pandora did go public at $16 last year, and its fundamentals are improving.

Pandora's now reaching 56.2 million active monthly users, and they took in 1.16 billion hours of content last month. To put this into its more impressive perspective, Pandora's listening hours and active users for the month of August soared 70% and 48%, respectively, over the past year.

Apple isn't perfect
Could Apple eat into that growth? Absolutely. However, Apple isn't always the musical tastemaker that it would like to be.

When it launched Ping two years ago, slapping a social networking layer to its iTunes music store seemed like a good idea. However, it never really caught on. Maybe it was the short song samples in an era where streaming services crank out entire songs. Maybe it was Apple's pretentiousness, believing that it could be a category killer without throwing a punch.

In an era where Pandora and Spotify are growing quickly -- and iPod sales continue to slide in favor of more versatile Apple gadgetry -- why are we putting Pandora's skull on Apple's stake?

The wide world of streaming players
It's not just Apple apparently aiming to make a big splash in music streaming. Spotify and Clear Channel's iHeartRadio are major recent players here. Sirius XM Radio has promised its own personalized streaming option later this year.

As long as the competition isn't making a dent in Pandora's growth, it's safe to suggest that Pandora will survive the likely Apple attack either later this year, or early next year.

If it does -- and it will -- can you imagine how high a buyout price tag Pandora would require in this important category?

If Google and Amazon are smart, they won't wait too long to make this move. Let's not dismiss cash-rich Microsoft, and the relevance-hungry Yahoo!, as potential players here, either.

Pandora's in the right place, and soon it will also be the right time.

Streaming out loud
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