Former Facebook exec Owen Van Natta will take the CEO job at a music discovery site called Playlist, a move that had been speculated last week, after he did not end up taking another position as head of MySpace Music.

Van Natta’s arrival at Playlist was not the only news for the Palo Alto, Calif.-based start-up–former AOL exec Bob Pittman’s Pilot Investment Group is also investing an undisclosed amount of money in Playlist. Pittman will also join its board.

Playlist has previously raised several million dollars, said sources, but the new funding is many times that, to total about $18 to $20 million.

The move to Playlist is an interesting one for Van Natta, who has looked at a number of jobs since leaving the high-profile social-networking site earlier this year.

He has talked to a wide range of companies, sources said, including Microsoft (MSFT) and a range of start-ups, as well as with MySpace, which is owned by News Corp. (NWS). (News Corp. also owns this site).

Those talks between Van Natta and MySpace to run its new music initiative did not pan out for a variety of reasons.

But he has long expressed a desire to become a CEO of a company, rather than just head to another executive job within a larger company, so the move to run a start-up is not a surprise.

In an interview this afternoon, Van Natta told me he got very intrigued by the possibilities at Project Playlist, which was the first iteration of the start-up and in which he is an investor, due to its viral growth.

And, indeed, Playlist has grown quickly to become one of the larger music communities on the Web, claiming that more than 38 million music fans monthly, sharing playlists via its Web site and also widely distributed embeddable widgets. The site has tens of millions of daily page views, according to surveys.

To get to those big-scale numbers, Playlist essentially has offered users a giant linking service for music, not unlike Google (GOOG) with all information, pointing users to promotional, free and sometimes illegal music and music video tracks all over the Web.

Those links to illegal music have resulted in a lawsuit aimed at Playlist from the music industry, sources said, a sadly typical experience of many online music services.

The usual tactic for the music giants: Sue first and shake down later.

Under Van Natta, I would guess, Playlist is likely to reach out to music companies and strike deals.

The company also needs to settle on its main business plan, which appears to me to have been less important than its explosive growth.

Playlist currently does have some small amount of advertising on the site, and seems to be making most of its scratch from sending leads to ringtone sellers.

Van Natta did not want to reveal specific strategies for Playlist going forward, only noting the opportunity is large.

“Discovery around music is exploding on the Internet,” said Van Natta. “And the company that does the best job of taking advantage of that is really going to be huge.”

That said, there have been a lot of music-aimed efforts like Playlist in the music space, with a lot of different business plans and varying degrees of success, ranging from the Apple (AAPL) behemoth iTunes site, which sells single songs, to the CBS (CBS) music service, Last.fm, which relies more on advertising revenues.

Other contenders in the space include the Rhapsody subscription service from RealNetworks (RNWK), music discovery service iLike and many others. MySpace has also waded deeply into the music space, and Facebook is also reportedly weighing its own service.

Van Natta was one of Facebook’s earliest and most prominent execs, serving in jobs like COO and also Chief Revenue Officer while there.

He came to Facebook in the fall of 2005, after a stint as VP of Worldwide Business and Corporate Development at Amazon, and was part of the founding team of A9, the Amazon search company.

“I am excited to be building a company again,” said Van Natta, who has taken many months off since he left Facebook in February.

Today, BoomTown boards the Acela Express from New York’s Penn Station to D.C.’s Union Station to attend the Senate hearing on the Yahoo agreement with Google to outsource some of its ad search business.

Titled rather ominously, “The Google-Yahoo Agreement and the Future of Internet Advertising,” the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights (eek!) will hear testimony at 10:30 a.m. at the Dirksen Senate Office Building from a passel of Internet reps, including those from Yahoo, Microsoft and Google.

It is chaired by Sen. Herbert Kohl (D., Wis.).

Will there be a lovely video of event? Indeed, there will be!

Added plus: I went to college and even worked on Capitol Hill, all before toiling at the Washington Post (Hey, Marcus!) for a dog’s age, so I know my way around the place.

And, as BoomTown readers might recall, I am not for the deal, mostly because it gives Google even more market power, even though the partnership is limited.

As I wrote:

As someone who has been a longtime critic of Microsoft’s (MSFT) historically thuggish tendencies, BoomTown finds it a little hard to believe that Yahoo and Google think that they can get away with any kind of significant search-ad outsourcing deal that would move the needle at Yahoo … .

And while it might be a long-cherished dream of Google’s to take over Yahoo search–and also get the chance to return to the scene of the crime, since Google got its first big push from doing Yahoo search, before Yahoo (YHOO) wised up too late–there is simply no way this will be allowed by regulators. Nor should it.

Still, you have to almost admire the chutzpah of the search giant in making this move, if the sheer and unadulterated arrogance of it wasn’t so distracting.

Because, while Google (GOOG) has almost none of the obvious menacing aggression that characterized Microsoft when it thoroughly dominated tech (although all those beach bikes on its campus inexplicably creep me out a little bit), the company still cannot be allowed to have a monopolistic share of the market.

It is bad for advertisers, it is bad for consumers, it is bad for innovation, no matter how well-intentioned Google is.”

So, you might imagine, I am looking forward to biting into this tasty piece of political theater!

Here is the list of speakers:

David Drummond
Senior Vice President
Corporate Development and Chief Legal Officer
Google
Mountain View, Calif.

Michael Callahan
General Counsel
Yahoo!
Sunnyvale, Calif.

Brad Smith
Senior Vice President and General Counsel
Microsoft
Redmond, Wash.

Matthew Crowley
Chief Marketing Officer
Yellowpages.com
Glendale, Calif.

Tim Carter
President and CEO
Askthebuilder.com
Cincinnati, Ohio

Please see this disclosure related to me and Google.