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Tuesday, March 09, 2010

Google Tests TV Search Service
The Wall Street Journal

Google Inc. is testing a new television-programming search service with Dish Network Corp., according to people familiar with the matter, the latest development in a fast-moving race to combine Internet content with conventional TV.

The service, which runs on TV set-top boxes containing Google software, allows users to find shows on the satellite-TV service as well as video from Web sites like Google's YouTube, according to these people. It also lets users to personalize a lineup of shows, these people said.

With the test, Google moves deeper into a crowded field of companies, large and small, that have been trying for years to marry the Web and TV and their business models—from rivals Microsoft Corp. and Apple Inc. to the manufacturers of televisions and set-top boxes.



Just last week, TiVo Inc. announced new digital video recorders that blend broadcast and online content.

Google's test, which began last year, is limited to a very small number of the company's employees and their families and could be discontinued at any time, said the people familiar with the matter.

Viewers in the Google test, these people said, can search by typing queries, using a keyboard rather than a remote control. Google hopes to connect the service with its nascent TV ad-brokering business, allowing it to target ads to individual households based on search and viewing data.

A Google spokeswoman said the company doesn't comment on rumor or speculation.

A spokeswoman for Dish Network, which has roughly 14 million subscribers, declined to comment.

Previous efforts to access Internet programming on TV sets have failed to catch on, partly because they required consumers to purchase extra hardware. By working directly with an operator like Dish and its hardware, Google could avoid the such issues. Unlike earlier efforts, Google's service isn't just about accessing Web content. It is also a search service that is integrated with the operator's programming.

For Google, which dominates Web search and the advertising revenue generated by it, the test represents another effort to extend its technology for delivering targeted ads into new fields, as its search business slows down.

The company is already playing a major role in the market for smart phones and mobile ads, for example, using an operating system called Android that is gaining popularity and supports a range of Google services.

Google appears to be pursuing a strategy to deliver ads across many Intenet-enabled devices from many Web sites.

The company hasd begun to target the market with a nascent ad-brokering business called Google TV. On the content side, its YouTube site has struck a variety of syndication deals with TV makers and console companies.

In addition to the test with Dish, Google has been talking to a range of other television-service providers and hardware makers, prodding them to use its Android-based technologies to offer a broader range of programming, a more personal experience and ads.

Google Chief Executive Eric Schmidt said in a January interview that it "makes sense that people would use Android as an operating system for set-top boxes and buddy boxes and TVs" and added "all of those ideas have been proposed by our partners." Mr. Schmidt said Google isn't in the business of making the hardware itself, but rather is concerned with search and Google SEO.

But playing any major role in TV won't be easy. Despite moves to create more open standards around set-top boxes, most cable and satellite companies closely guard their set-top box software and their overall programming experience.

While many are scrambling to find ways to take advantage of programming delivered using the Internet, hardware companies and operators have tended to custom-tailor such offerings rather than offer access to all Web sites. They may actively resist the notion of opening their services to Google.

To make TV ads more targeted, cable companies have banded together to form Canoe Ventures, a consortium that has agreed to roll out ads targeted at particular demographics– and eventually households—on a national scale. The project has been delayed due to technology issues.

Google's own TV ad business is a cautionary tale. Google has sold ads on TV since 2007, opening the program up to all advertisers in 2008. Currently advertisers can buy TV ads online for nearly 100 national cable networks, according to the company, and track how the ads perform.

But the program, which relies on an online auction similar to its search business, hasn't generated any material revenue for the company.

Google has attributed the reception to the fact that many set-top boxes or TVs aren't capable of delivering the two-way feedback it uses to tailor its algorithms. That problem has eased somewhat lately, as a large number of new TVs now come with Internet connections.

People familiar with the matter say Google plans to pursue a similar strategy on TVs as it did with mobile phones, using Android and other software technology to help open TVs and set-top boxes to new content and new ads.

Richard Doherty, director of technology consulting firm Envisioneering Group, says Google has a good shot of luring users due to technology advantages. For instance, he says set-top boxes running Android or other bits of software Google developed, like Chrome, could be updated instantly, while operators take much longer to refresh their offerings.

"No one Net entity has the deep resources to give so many viewers free features which could enrich Google far beyond the operators' own dreams," he said.