Yahoo on Wednesday announced an effort to provide the software underpinnings of network-enabled TV, a move that could transform not only what it means to watch TV but also what it means to advertise on it.
Though the TV experience has been spiced up by voting for American Idol contestants, it generally has retained its famously passive character. Yahoo wants to change this by bringing a version of its Yahoo Widget Engine, a software foundation that can run small applications called widgets, to network-enabled TVs.
This new version, called the Widget Channel, will resemble the version that's available for PCs, but will come with a different user interface to let programmers build widgets that can be controlled from a distance with a remote control, said Patrick Barry, Yahoo's vice president of connected TV at Yahoo.
Yahoo's hope is the move will bring its clout on the Internet to a new domain.
"Our goal is to aggregate a very large, multimillion-person audience across a number of devices with our standard platforms so we can start to address the audience in a unified consistent way, and ultimately create a liquid advertising market," Barry said.
Yahoo is working on partnerships with TV makers to have the software built in and integrated with TV functions. "I'm quite sure there are going to be products on this," Barry said. "I expect to see some things next year."
A first example of the technology emerged at the Intel Developer Forum on Wednesday during a speech by Eric Kim, general manager of Intel's Digital Home Group. A demonstration of the technology showed widgets for monitoring eBay auctions, using the Twitter microblogging service, and viewing Flickr photographs.
Intel and Yahoo are natural allies in the technology effort. Both companies are powerful in their current markets, but as much in the giant consumer electronics market. Intel wants to sell processors--in this case the newly named Media Processor CE 3100 that had been code-named Canmore, and Yahoo wants to expand the reach of its content and ads.
ZDNet video: Intel, Yahoo team up on interactive TV platform
But history shows the effort won't be easy; the consumer electronics industry has withstood years of attempted incursions by computing companies employing various "convergence" strategies.
One of Intel's chief advantages is that so much existing software and programming tools already are compatible with the widely available x86 processor family used in all of today's PCs. "We see the PC architecture coming to consumer electronics over the next few years and that driving a ton of value," Barry said.
Though the Intel-Yahoo demonstration used a system based on Intel's processors, the Yahoo technology will run on other hardware, Barry said. And because it uses platform-independent standards such as HTML and Flash, programmers won't have to worry about having to adapt their widgets for the underlying hardware, he added.
The software can work in different modes, including a sidebar that overlays part of the TV image and a full-screen mode that takes over completely.
A new ad market
Naturally, Yahoo is eyeing the ad business that it expects will come with the Widget Channel, though it won't be the sole conduit for advertisers. Yahoo believes the Widget Channel will come with the best features of both TV and Web advertising, Barry said.
"We're not getting into this game for our health," he said, pointing out that television ad spending is still five times that of online spending. "Yahoo will provide advertising services to this platform, but we're not going to be the only ones. And we're not going to be a gatekeeper or tollkeeper," Barry said.
Users will be able to select TV widgets from a gallery, but the Widget Channel software will be built into the TV, Barry said.
Among those developing TV widgets are Blockbuster, CBS Interactive, CinemaNow, Cinequest, Disney-ABC Television Group, eBay, GE, Group M, Joost, MTV, Samsung Electronics, Schematic, Showtime, Toshiba, and Twitter, Yahoo said. (CNET is a division of CBS Interactive.)