June 23 (Bloomberg) -- Google Inc., owner of the most-used Internet search engine, started offering television shows and movies online for free to attract more users and the advertisers seeking to reach them.

The videos, including episodes of ``The Charlie Rose Show'' and films such as ``Billy the Kid,'' are sponsored by advertisers, Mountain View, California-based Google said today on its Web site. The videos available today usually sell for as much as $14.99, Google said.

Google started selling television shows online in January, charging users a fee for each episode. The free videos are displayed alongside a small text ad and the logo of the advertiser. Initial sponsors include computer-maker Hewlett- Packard Co. and online video rental site Netflix Inc. Users can also click to see video advertisements from the sponsors.

``Google's move shows we're in the middle of a clear shift to more and more video-linked Web services,'' said Jankees Ruizeveld, who helps manage the equivalent of $2.2 billion in equities at Optimix Vermogensbeheer NV in Amsterdam, including Google shares. ``Video Web services will become increasingly important, which means extra infrastructure capacity is needed and as a result big investments will be necessary.''

Shares of Google rose $4.91 to $404.86 at 4 p.m. New York time in Nasdaq Stock Market composite trading. They have declined 2.4 percent this year.

The company is only making a selection of its videos available for free in the test. Shows such as CBS Corp.'s ``Survivor'' still cost $1.99 an episode. User-generated video content will remain free of charge and ad-free, Google said.

New Competition?

``We are always looking for ways to show targeted and engaging advertising to users and we think that Google Video is a natural extension of this ongoing effort,'' the company said in an e-mailed statement.

Making shows available for free may spark new competition for Apple Computer Inc.'s iTunes Music Store, which began selling videos online in October. Apple charges $1.99 per episode for shows such as ``Desperate Housewives,'' made by Walt Disney Co.'s ABC.

Cupertino, California-based Apple said in April that more than 15 million videos, at $1.99 each, have been sold since the company added that content in October.

Orders for the iPod music player and sales of music and videos through Apple's iTunes online music store accounted for 50 percent of the company's second-quarter sales, the company said April 19.

Video Content

Google's move, reported earlier today in the Wall Street Journal, highlights how media companies are searching for workable business models to sell video content online. Disney, the second-biggest U.S. media company, in April announced a test for making primetime ABC shows available online for free. The shows are funded by advertising that users aren't able to skip.

``There are some activities that generate all the money for Google and they're doing lots of other things that they hope will make money in the future,'' said Marco van Rijn, who oversees the equivalent of $7.5 billion as head of the ING Bank Global Fund at ING Investment Management in The Hague and owns Google shares. ``We don't attach a lot of value to add-ons like video.''

To contact the reporter on this story: Jonathan Thaw in San Francisco at jthaw@bloomberg.net.

Last Updated: June 23, 2006 16:14 EDT