Aug. 27 (Bloomberg) -- TiVo Inc., the maker of digital video-recorder technology, forecast a wider third-quarter loss than analysts estimated because of increased marketing costs before the holiday shopping season.

The net loss will be $7 million to $9 million on service and technology revenue of as much as $51 million, the Alviso, California-based company said today in a statement. Analysts in a Bloomberg survey predicted a $2.33 million average loss.

The company reported a profit of $2.94 million for the second quarter ended July 31 after using marketing partnerships with retailers to help cut the cost of acquiring users to $135 from $758 per subscriber. Chief Executive Officer Thomas Rogers said marketing and manufacturing expenses will grow in the current period.

``Marketing expenses into the holidays get harder,'' Rogers said in a telephone interview. ``We're trying to be as realistic as possible.''

TiVo fell 30 cents to $7.66 in extended trading. The shares, which climbed 43 cents to $7.96 today on the Nasdaq Stock Market, have lost 4.6 percent this year.

Service and technology revenue, which excludes hardware, fell 5.2 percent to $53.5 million in the second quarter, TiVo said today. During the period, the company announced a partnership with Walt Disney Co. to let subscribers download movies directly from their televisions. It also began offering a service to let users buy products from Amazon.com Inc. Total sales rose 4.1 percent to $65.2 million.

Licensing Deals

The company has reached licensing agreements for its DVR software with cable operators, including Cox Communications Inc. and Comcast Corp., and Rogers added shopping and video-on-demand features to attract users and boost revenue.

Net income in the second quarter was 3 cents a share, compared with a loss of $17.7 million, or 18 cents, a year earlier, when the company wrote down the value of inventory.

TiVo lost 178,000 net users during the quarter, to finish with 3.6 million subscribers, as cable companies and satellite providers offer their own recording devices. Alan Gould, an analyst with New York-based Natixis Bleichroeder Inc., had expected TiVo to lose 145,000.

A ruling in a patent dispute between TiVo and Dish Network Corp., which could come as early as Sept. 4, could force Dish to shut down or replace as many as 4 million DVRs as early as next month.

``The real driver of this stock should be the results of Sept. 4,'' said Gould, who advises buying the shares and doesn't own any. ``I think TiVo's got a good shot of winning.''

(The company began a conference call at 5 p.m. New York time. To listen, visit http://www.tivo.com/ir.)

To contact the reporters on this story: James Callan in New York jcallan2@bloomberg.net; Sarah Rabil in New York at srabil@bloomberg.net

Last Updated: August 27, 2008 17:51 EDT