Integration is always a risky business and Google's latest attempt to do something different is a gambit, but it does carry the potential of transforming both the web and TV.
Web search king Google Inc on Thursday showed off a risky attempt to marry the Web to television and reach the $70 billion TV advertising market, chasing a dream that has eluded even archrival Apple Inc. Developers at a conference applauded Google TV, and a slew of tech industry titans, including microchip maker Intel Corp and TV maker Sony Corp, sent their chief executives to announce that they had joined the project and that TV sets would be ready in time for Christmas buying. The key to Google TV is an on-screen search box, just like on Google's Web site.
The TV search box accesses Google's search engine to look through live programs, DVR recordings and the Web, delivering a relatively compact list of results that can be accessed with a push of the button. Internet television has been a minefield for the world's most creative and deep-pocketed companies, and in a sign of the challenge, embarrassed Google engineers struggled initially to get their TV running, asking the audience to turn off their cellphones, which were interfering with TV remote controls.
Web surfers have never left their desktops for the living room, and television watchers have kept their remotes pointed toward familiar territory despite attempts by Microsoft Corp and by Apple, which was the focus of frequent verbal jabs and jokes. Sony will build devices, marketed as Sony Internet TVs, to launch in the United States in the fall -- in time for the 2010 holiday buying season -- with Intel providing its small Atom processors to run machines.
Sony did not release pricing. Logitech International also will create a Google TV appliance that can work with current high-definition TVs. Television represents an attractive market in which to expand Google's Internet advertising business, which generated the bulk of its $23.7 billion in 2009 revenue. Walkman creator Sony has seen its dominance in electronics eroded and has been looking for new technology, including 3D, to goose TV sales.
Video should be consumed on the biggest, best and brightest screen in the house. And that's a TV. It's not a PC or a phone or anything else in between, said Google project senior product manager Rishi Chandra.
Best Buy Co Inc will sell devices and DISH Network Corp will integrate its satellite television service into Google TV.
Chief executives from those companies -- as well as Google, Sony, Intel, Logitech and Adobe Systems Inc -- all appeared on stage at Google's developers' conference for the announcement.
The move fits in with Sony's strategy to focus more on its content business, said Mizuho Securities analyst Ryosuke Katsura. Sony is trying to be asset-light and increase earnings from content distributed online, he said.
For device development, it is seeking alliances rather than going it alone like it has been doing up until now, and this deal is a part of that move. Shares in Sony, the world's No. 2 LCD TV maker behind Samsung Electronics Co, dropped 0.6 percent in Tokyo morning trade but outperformed a 2.9 percent fall in the benchmark Nikkei average.
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