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As Google readies a new TV service to be launched by the end of the year, rival Yahoo is stepping up its own efforts to infiltrate your television set.

Some 3.5 million TVs have already shipped with Yahoo’s Connected TV platform since its debut in mid-2009. The platform lets users install Internet apps, or “widgets,” to do things like watch shows bought through Amazon or rented through Netflix, or browse eBay and Facebook while watching TV. Yahoo announced today that Toshiba will begin shipping TVs with the platform–joining Sony, LG, Samsung, and Vizio.

Yahoo and Google both hope to make advertising dollars through Internet-connected TVs. Such ads would be targeted to TV content. For example, while an app on an Internet-connected TVs could automatically pull up scoring data to accompany a sports broadcast, advertising could show merchandise for the viewer’s favorite team.

Google is working with Intel to create a powerful dedicated TV device featuring Intel’s Atom processors. Yahoo’s approach is fundamentally different–it’s making Internet apps that could work on even relatively cheap TV sets, rather than selling a separate computer-like set-top device. Yahoo also started out working with Intel, but then pivoted to focus on the lower-end chips used by TV manufacturers, such as chips made by Broadcom, ATI, and ARM.

“TVs are designed for video performance, not application performance, and have little internal storage,” says Russ Shafer, a senior director of marketing at Yahoo. “So we developed a very light, cloud-based platform.” Yahoo’s platform can be shipped with almost any TV capable of connecting to the Internet, the cheapest being a model available from Vizio for $299.

“Yahoo was one of the first entrants into this space,” says Colin Dixon, a senior partner with Frisco, Texas-based TDG Research, an analyst firm specializing in digital media. “Getting into the low end was an interesting strategy that gives Yahoo a good lead in terms of getting their platform out there, although I’m not sure user numbers are high yet.”

So far, around 65 TV models running Yahoo’s software are available. As a result, Yahoo is one of the first companies to have data on how TV viewers use Internet apps on TVs. “The most popular apps today are video-on-demand and Facebook,” says Shafer, who adds that users have shown how TV and Internet content can share the screen. “Users can turn to Twitter to add information not featured in a news broadcast as an event unfolds,” he says.

Shafer says that Yahoo’s user research supports the decision to eschew adding a Web browser and keyboard (unlike Google TV). “We’re not trying to force people to do that because it isn’t what people want–Apple is on the same model.” When Steve Jobs unveiled his firm’s revamped Apple TV product earlier this month, he said that Apple’s research had also shown that users want a simpler approach.

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Credits: Yahoo

Tagged: Communications, Google, apps, Yahoo, internet TV

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