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Goog / Tivo together?

Google came out with blockbuster numbers yesterday prompting everyone but shareholders to gasp in awe. They had a profit of over $1B, nearly triple the amount from the same qaurter a year ago. It also appears that big brands, the slowest movers to the internet ad game, and also Yahoo’s one major advantage over Google are moving aggressively towards Google’s advertising platform. In an article in this week’s Business Week they review the Google call from yesterday, where they mentioned that these big brands such as Proctor and Gamble, Volvo, and Officemax have all placed video, banner, and text ads across google’s network.

I was most interested in the part of the article concerining Google’s ability to advertise on TV.

Schmidt even implied that television advertising was ripe for Google to handle. He said Google’s targeting technology can “really apply well” to TV, and allow television stations to charge much higher rates for that targeting. He said there was an opportunity for Google to use data from TV set-top boxes, which have unique Internet addresses, to do that targeting.

I think there is definitely a huge opportunity here for Google. But I think there may be an equally big opportunity here for a little company called Tivo. They are far and away THE brand of dvr devices. Like Google they have become a verb as people often refer to recording a program as “tivoing” it. My real question is when are they going to drop the hardware/service provider biz and start licensing their name/software to cable companies. If they would’ve done this already, they’d be sitting on top of access to the largest network of set top boxes in the world. We know they are building creative and interesting ways to deliver advertising by their recent patent applications, so why not move forward with the master plan already?

It’s been said before, but I’ll say it again…Tivo is an acquisition target. At $518M market cap, it’s worth less than HALF of youtube, a company with very little revenues at the time of it’s acquistion. For a billion dollars or less (less than Google’s profit this quarter) someone could most likely have Tivo’s loved brand, name, and service to call their own. Can you imagine what a company with deep pockets like Google’s could do with Tivo? They could preinstall google earth on every device, run video ads and video adwords, and even show youtube clips right on the tv. They could open up google video’s video marketplace to let people pay and view videos streamed. There are a million possibilties.
Google, what do you think?

(by the way, I’m a tivo shareholder)

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