• by Laurie Sullivan  @lauriesullivan, May 20, 2010

Google unveiled Google TV at the Google I/O conference Thursday in hopes of capturing some of the $70 billion dollars spent on ads in the U.S. annually. The open platform will run on Android 2.1 with an update soon to 2.2, a version announced today. Sony will provide a line of TVs; Logitech, companion box and controller with keyboard; Intel, Atom processor; and Dish Networks, connectivity.

Google TV will become available in fall 2010 in television sets, Blu-ray players and set-top boxes through partnerships. The platform will sell in Best Buy stores. The speculation began last week that Google would make the announcement at the developers conference. Limited tests are being run with Dish Networks. The tests mostly center on search programming.

And although there is no word yet on how advertising will work through Google Content Network, Google AdWords and Google AdSense, from the demonstration, attendees could see that companies and brands in paid-click and display ads will have exposure on the TV, as they do on the Web. Google TV brings the search browser to the television. Consumers searching the Web on Google TV will see the same ads that are visible on their PC.

The pitch for the new platform means that consumers can toggle from search on the Internet to television programming without the need to navigate through clumsy on-screen directories. A search box will give consumers the same feel on the television that they will find on the Internet. It makes the TV "a natural extension of the Web itself," Rishi Chandra told 5,000 developers at for Google I/O conference in San Francisco. "Video should be consumed on the biggest, best and brightest screen in the house, and that is a TV."

Intel Chief Executive Officer Paul Otellini, who sits on Google's board, described the version of the Atom processor in Google TV as circuitry found in devices running high-definition video.

David Hallerman, eMarketer senior analyst, calls it a good start -- but not as giant a step as the words Google and TV seem to suggest. "One problem is most of the video on YouTube isn't the highest quality," he says. "People get larger screens to see high-definition content. On the other hand, the reach Google has with advertisers and agencies will become helpful to grow the ad business."

At first, the demonstration of the Google TV did not go smoothly at the Google I/O conference. The glitch blamed on too many people eating up the WiFi access caused a delay. There were so many people in the audience that the demonstrator ran into repeated problems as he showed how the technology works. The platform did switch seamlessly between the Web and the television programming after Google pleaded with the attendees to disconnect their phones from the wireless network.

Back on track, Google demonstrated the ability to use Android phones to control their TVs with voice searches -- and how someone watching a video on an Android phone via YouTube can push that video directly to Google TV over Wi-Fi -- and explained opportunities in building apps on the Android platform to developers.

One thing for sure -- Google TV will create a massive Android developers network, far larger than if the platform aimed to support only mobile devices.

Analysts hope Google's venture into television will go more smoothly than the demonstration. Others such as Apple and Microsoft have tried connecting consumers to the Internet through the TV, servers and set-top boxes. Some have failed. PopBox began offering Internet connectivity through televisions in 2001, but it wasn't until 2006 that the company gained ground by powering Hewlett-Packard's MediaSmart Server.

"The biggest challenge might come with working alongside big consumer electronics companies that may not want to give Google control of the user experience," says Alex Limberis, PopBox chief operating officer.