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Friday, October 28, 2011

Google takes another shot at the TV market | Reuters

Google takes another shot at the TV market

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Mon, Oct 24 2011

SAN FRANCISCO | Fri Oct 28, 2011 9:06pm EDT

SAN FRANCISCO (Reuters) - Google Inc is making another push to bring its Web savvy to television sets, hoping to tap into a vast new market despite consumers' lukewarm reaction to one of its initial offerings.

The Internet search engine unveiled a revamped version of its Google TV service and announced plans to create about one hundred online "channels" of original video programming for its YouTube website, in separate announcements on Friday.

The YouTube channels will feature videos created though partnerships with various media organizations, and involving celebrities including rapper Jay-Z, Madonna and skateboarder Tony Hawk. The partnerships involve more than $100 million in upfront payments by Google to the various partners, according to a person familiar with the matter.

The new 2.0 version of Google TV provides new tools for recommending movies, TV programs and online videos to TV viewers, and makes it easier for software developers to create new apps for the television screen.

Google TV -- which currently comes built-in on certain Sony Corp television models and on Logitech International set-top boxes -- allows consumers to access online videos and websites on their TVs, as well as to play with specialized apps such as video games.

"There's a lot of thirst for using the Web in the living room," said Google Product Management VP Mario Queiroz, who is leading the Google TV initiative.

But in a sign of the many challenges that have frustrated Google's ambitions to conquer the living room, as well as those of other tech companies including Apple Inc, Queiroz described Google TV as a "long-term bet."

"I don't know what exact month this will take off," he told Reuters during a demonstration of the new product at Google's Mountain View, California headquarters last week. "I do think there's been a lot of progress over the past year and this next year there will be a lot more progress."

Google does not disclose how many users it has for Google TV, which was launched with great fanfare last year. But some analysts say that version 1.0 of the product has been a flop.

"The fire they were trying to start never even got a spark," said Forrester Research analyst James McQuivey.

The $299 price for the least-expensive Google TV device was too high, said McQuivey (Logitech has since reduced the price of its device to $100). And the fact that many of the television networks, perhaps sensing a threat from Google, blocked the Web-based versions of their shows from being accessible on Google TV devices created confusion among consumers, he said.

But TV is too attractive a market for Google to ignore, say analysts.


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