Yahoo! adding interaction to Connected TV

Yahoo! is out to build on its lead over Google and Apple in the budding smart television market by letting television broadcasters connect in real time with viewers.

Yahoo! and several television networks on Wednesday launched a pilot "interactivity" program for its Connected TV on the eve of the opening of the Consumer Electronics Show (CES) gadget extravaganza in Las Vegas.

"This is the next phase of where television is heading and we think we have a strategic advantage being out on the market for two years now," said Russ Schafer, senior director of product marketing at Yahoo! Connected TV.

"We think it is really going to change TV," he said.

Television sets embedded with Yahoo! software "widgets" that link to specific websites launched at the annual CES event in 2009 and are now in about six million households.

Yahoo! expects that number to rise to eight million by March, when 2011 models featuring broadcaster interaction begin hitting the market.

Broadcasters will be able to send discrete on-screen messages prompting people to take actions.

For example, people watching a sporting match could be enticed to predict winners or those viewing dramas invited to learn more about actors. Advertising will be individually customized based on what is being watched.

"It allows a real-time dialogue of sorts between creators and viewers," Schafer said.

CBS, Showtime and Home Shopping Network are taking part in the pilot program, which will be limited to the United States.

"Interactive platforms like Yahoo! Connected TV help us give our viewers an even richer entertainment experience while keeping them engaged with our shows, stories and characters," said CBS spokeswoman Colleen Kenny.

Japanese electronics titans Toshiba and Sony will embed the new Yahoo! feature in 2011 model TVs while firms including Haier and D-Link are building boxes that will add the capabilities to previous generation sets.

"It will be hard for a lot of other (hardware makers) to duplicate our experience," Schafer said. "We see this next phase distancing us from the competition and it will be difficult for others to follow."

Google last month asked several television makers to delay launching sets featuring Google TV, which merges online content with traditional TV programming.

Google evidently wants more time to refine the software and build relationships with studios behind the content.

US television networks NBC, CBS and ABC and the Hulu entertainment website have blocked people from watching full-length shows on their websites using Google TV.

"Google TV has been getting a lot of negative press with networks blocking their content," Schafer said. "Our approach is very network friendly."

The Mountain View, California-based Google unveiled Google TV in May at a software developers conference in San Francisco.

Developed in partnership with Sony, Logitech and Intel, Google TV allows users to mesh television viewing with surfing the Web.

Sony unveiled a line of Internet-enabled television sets in October featuring Google TV, and Logitech began selling set-top boxes that route Web content to existing TV sets.

Meanwhile, California-based Apple has sold more than a million of its second-generation Apple TV boxes in the three months after the devices hit the market late last year.

"The ability to tie real-time Internet-delivered information to content on the screen is a big deal," said Gartner analyst Van Baker. "It does put Yahoo ahead of Google, which is struggling with the Google TV platform a little."

Synching ads or other content to what is being watched on TV "doesn't happen today," according to the analyst.

"The content creators love the idea because it gives them another way to touch the consumer," the analyst contended. "The goodness for the consumer is that they get enhanced content. It is a win-win scenario."