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Google (Nasdaq: GOOG ) is evaluating Android-based set-top boxes for TV watching, according to The Wall Street Journal. The trial consists of a handful of Google employees sucking in signals from the satellite TV service of Dish Network (Nasdaq: DISH ) , with personalization and content search provided by the Android bits.
Dish and Google have been partners for three years, but a lack of two-way communication between set-top boxes and Google's servers has limited the success of that partnership, and Google still doesn't see any significant results from its TV ad sales. But if the current field trials expand to a wide rollout across the Dish network or anybody else, that tune could change in a hurry.
That won't happen overnight, of course, no matter how impressive the Google-powered boxes may be. Dish has 16 million customers today, many of whom use multiple boxes, and replacing all of that hardware would be stunningly expensive. Instead, I envision Google working its way into the retail end of things -- cable box provider Motorola (NYSE: MOT ) is a member of the Open Handset Alliance that defines and promotes the Android platform.
More to the point, so are Samsung, NEC, Toshiba, and LG Electronics, all of which have large presences in the consumer electronics market. Blu-ray players are built to be connected to broadband networks, and next-generation television sets will also come with big-time connectivity. Whatever stand-alone boxes you buy these days, like a TiVo (Nasdaq: TIVO ) DVR, will have that kind of power, too. In other words, Google might just be warming up with small-scale tests before the big push into your living room happens through the retail electronics channel. That's much cheaper and easier than replacing every cable box in the world.
Set-top cable and satellite boxes may soon be a thing of the past. In the early 1950s, you needed a converter box to receive those newfangled UHF signals, but TV manufacturers soon caught on and built UHF receivers right into their TV sets. There seems to be a glitch in the Matrix, as it's happening all over again, only with digital TV signals this time. Sony (NYSE: SNE ) , Panasonic (NYSE: PC ) , Samsung, and their ilk are about to unleash highly connected TVs with new features like Netflix (Nasdaq: NFLX ) movie streams and online weather updates. Some of those sets could very well run Android software and enable Google's ads to reach for your eyeballs in a whole new medium.
Will Google-powered personalized ads be good for consumers or just for Google shareholders? Discuss in the comments box below, and try to keep it civil.