Just Buy TiVo, Google!

For years, I've argued that Google (Nasdaq: GOOG  ) should buy TiVo (Nasdaq: TIVO  ) . Now that the search king has officially launched Google TV, there should be no more excuses -- these two need to get hitched. Here's why.

TV's three trials, solved
Think of what makes television infuriating. Aside from Tyra and America's Next Top Model, I mean. I'll bet there are three things that most bother you:

  1. Lousy advertising. I'm not talking content here. I mean, really, who among us not named Lindsay Lohan doesn't love a good E*TRADE baby ad? The problem is that those ads, while cute, mean nothing to the viewer who wants his/her 401(k) to remain on permanent autopilot. Yet today's TV can't distinguish between viewers. As such, it broadcasts inappropriate or (worse) annoying ads.
  2. Frustrating choices. Today's TV viewers are captive unless they have either (a) TiVo, or (b) a connection to downloading or streaming services such as Amazon.com's (Nasdaq: AMZN  ) Video on Demand, or Netflix's (Nasdaq: NFLX  ) Watch Instantly. Both offer viewers more than they can get currently, and could become interesting earnings drivers if added to the everyday TV experience.
  3. Poor organization. Look at your cable TV guide, and you'll know what I mean. Conversely, Google TV makes programming findable, regardless of where it resides. This feature is also why some expected Google TV to be called Smart TV prior to the service's official launch last week.

Google TV is already designed to solve the third problem, and the first problem will go away once The Big G strikes deals with advertisers. But Google has no answer for the second problem, and Google TV won't change that without help from partners.

Competitors, meanwhile, will do their best to fill the void. Apple (Nasdaq: AAPL  ) is already hugging Netflix by making the iPad a conduit for broadcasting Watch Instantly streams over any compatible TV. Microsoft (Nasdaq: MSFT  ) has long professed an interest in winning the war for the living room.

Now imagine if Google bought TiVo.

Google TV would not only offer a better method for organizing programming, but would also allow for pause and playback of live TV, connections to streaming and downloading services, and a software foundation for enabling high-tech programming on any Google device, including a tablet.

Pay whatever it takes to get TiVo, Google. Because if you don't, someone else -- (cough) Apple (cough) -- will.

Do you think Google TV is Must-See TV? Discuss in the comments box below.

Amazon, Apple, and Netflix are Motley Fool Stock Advisor selections. Google is a Motley Fool Rule Breakers recommendation. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has nothing further to say at this time. Thank you for your cooperation.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 24, 2010, at 3:57 PM, Matt8265 wrote:

    It's way to logical for a Google that thinks they need no one.

  • Report this Comment On May 24, 2010, at 8:20 PM, mmaclaurin wrote:

    Tivo's cap is over a billion. Hard to imagine Google coughing up that much for a company that's losing money...

  • Report this Comment On May 24, 2010, at 8:41 PM, SreeRama wrote:

    I am sure there are suitors already circling TIVO or they will start circling and courting soon; however, I am sure no knows how to value TIVO at the moment. In other words; amongst the stable of innovations and patents that TIVO has, there is a overhang of uncertainty or legitimacy. It's quite surprising to see how the board of DISH Networks has so far put up with Charles Ergen, his IP violations and his costly legal fights even after the courts have ruled in favor of TIVO again and again and again...

    Bottom line, TIVO's board would not agree to sell TIVO for anything less than 3 times today's price (that would be approximately $27/- per share). That's actually chump change for Google or Apple considering the cash on hand and the cash flow they have. However, they sure are finding it harder to justify that price because of the ongoing legal tussle...

  • Report this Comment On February 13, 2011, at 10:23 AM, THEMATHISNEAR wrote:

    @mmaclaurin: Yeah, it would also be hard to believe that Google would pay over a billion for a two-year-old online video company that is being sued by everyone and their dog for copyright infringement. Oh, wait...

    My point is the same as Beyers: it's not what Tivo has done, or even what they are, but what they could become.

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