By Ian King and Brian Womack
(Bloomberg) — Google Inc. introduced software that puts Web content on television to persuade more consumers to use the Internet in their living rooms and view advertisements that generate revenue.
The new tool, Google TV, will work with Intel Corp. chips in products by Sony Corp. and Logitech International SA, Google said today at a conference in San Francisco.
The companies are trying to benefit from growing demand for Web-based programming and information on large screens, in more rooms of the house. Google, with the largest share of online advertising, wants a slice of the $174.9 billion TV-ad market. Intel aims to land its chips, already in about 80 percent of the world's personal computers, into a wider range of electronics.
"Television is becoming the true third window, with the computer and the phone, allowing you to access what you want when you want it," Eric Kim, who heads Intel's digital home division, said in an interview. "The dumb tube is turning into an intelligent device, a smart TV."
Google TV serves as an "entertainment hub" that lets viewers search channels, recorded shows and websites, Google said in a video on its YouTube entertainment site.
Google fell $15.62 to $478.81 at 12:25 p.m. New York time on the Nasdaq Stock Market. Before today, Mountain View, California-based Google had declined 20 percent.
The service will include video-on-demand products from Amazon.com Inc., Netflix Inc. and Hulu, a video site partly owned by Walt Disney Co., Google said at the conference.
During the presentation, Google also unveiled a new version of its Android operating system for mobile phones. Called Android 2.2, the new iteration is faster and has more features tailored for business users, Vic Gundotra, vice president of engineering, said at the conference.