Google's Next Search Frontier -- TV

Google (GOOG) has begun to migrate its search technology to TV, according sources cited byThe Wall Street Journal. The first test of the service has been done with satellite television provider Dish (DISH). The system will run on set-top boxes with special software that allows viewers to search for shows and content from online video properties like YouTube.Google is up against the fact that the majority of set-top boxes in the U.S. are distributed and controlled by major telecom companies, particularly AT&T (T) and Verizon (VZ), which have fiber-to-the-home products, and the largest cable companies including Comcast (CMCSA) and Time Warner Cable (TWC). It is not clear why these firms would want to do business with Google. They have their own advertising sales forces and would hardly want to join the search firm's online TV ad bidding service. Bidding services tend to drive down ad prices by allowing marketers to search for the cheapest rates.

Cable and telecom companies have surely watched Google's successful foray into the mobile phone industry with the Android operating system. Android has done well gaining market share, which poses a threat to other handset OSs. Android is now being pushed as software for TV set-top boxes. Cable and telecom firms may not want the Google fox in their hen houses.

Google will also try to add its TV advertising sales brokerage product to the search program. So far the brokerage service has not been much of a success. But the basic question is whether consumers want a Google TV search service at all. Cable and telecom-delivered products have their own on-screen TV guides and VOD products, and customers may be completely satisfied with those services. Google may be offering a product that almost no one wants.
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