Apple has pulled off a coup by luring Google CEO Eric Schmidt to its board of directors, in a move that was announced late last night.

“Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead,” said Apple CEO Steve Jobs, in a statement.

Schmidt said: “I’m really looking forward to working with Steve and Apple’s board to help with all of the amazing things Apple is doing.”

The appointment may signal intent on behalf of the two companies to cooperate more closely in a bid to challenge Microsoft, with some commentators openly predicting a merger between Google and Apple.

Is this a move towards lining up Schmidt as Jobs’ replacement? Conspiracy theories abound.

Does this suggest that we can finally bury all the rumours about ‘Google Music’? Well, if Google and Apple were going to be competing head-to-head then surely Schmidt wouldn’t have accepted the position. Should they do so in future, there will be a conflict of interests and he’ll presumably have to step down.

So perhaps ‘Google Music’ is dead, or was never going to happen. Either that or we’re going to see a fairly sizeable iTunes + Google tie-up.

Watch this space, especially if you are Steve Ballmer…