Google already had a partnership with Panoramio to show images in Google Earth through one of its default layers -- but now that partnership has become an acquisition. Panoramio is a service that places geo-tagged images on the map so you can view pictures in geographic context.
Panoramio is a community photos website that enables digital photographers to geo-locate, store and organize their photographs -- and to view those photographs in Google Earth. Other users can search and browse Panoramio photos and suggest edits to the metadata associated with the photos. Panoramio also offers an API that enables web developers to embed Panoramio functionality into their websites.