* Google TV to launch in Europe early next year
* Chairman Schmidt urges lighter TV regulation in Britain
* Schmidt says Google can be a friend to the TV industry
(Adds analyst comment)
By Georgina Prodhan
EDINBURGH, Scotland, Aug 26 Google Inc (GOOG.O)
will launch its TV service in Europe early next year, Executive
Chairman Eric Schmidt said on Friday, despite teething problems
that had led some observers to question how committed the
company would remain to the project.
Google TV, which allows viewers to mix Web and television
content on a TV screen via a browser, was launched in the
United States in October but received mixed reviews and was
swiftly blocked by three of the top U.S. broadcast networks.
Large parts of the television industry, like the news and
telecoms industries, view Google with suspicion and accuse it
of stealing their advertising revenues without contributing to
the costs of making programmes.
Schmidt sought to allay the fears of Britain's broadcasting
elite in a speech to the Edinburgh television festival, the
first time a non-TV executive had been invited to give the
keynote MacTaggart lecture at Britain's premier industry
"Some in the US feared we aimed to compete with
broadcasters or content creators. Actually our intent is the
opposite," he told an audience who quickly warmed to his
friendly style and liberal compliments to the quality of
"We seek to support the content industry by providing an
open platform for the next generation of TV to evolve, the same
way Android is an open platform for the next generation of
mobile," he said.
"We expect Google TV to launch in Europe early next year,
and of course the UK will be among the top priorities."
Google TV has gained little traction so far in the United
States, and its set top box provider Logitech International SA
LOGN.VX slashed prices to $99 in July from an initial price
Schmidt also included a warning to British television
regulators, who he said were far more stringent than their U.S.
counterparts and threatened to throttle the development of
British television companies in an increasingly global market.
"Stifling the Internet -- whether by filtering or blocking
or just plain turning the 'off' switch -- appeals to policy
makers the world over," he said. "Instead, policy makers should
work with the grain of the Internet rather than against it."
Google has long held ambitions in the television arena,
hoping to extend its online advertising business, which made
$28 billion for the company last year, to the big screens that
still command the lion's share of global advertising budgets.
"If his ambition was to go there and convince the TV people
he wasn't a big threat, I don't think he achieved it," said
Keith McMahon, an analyst at research firm Telco 2.0/STL
"The message I got was that TV is such a big market that
Google can't ignore it. They're never going to give it up."
So far, Google has had little success breaking into the TV
market, despite its ownership of the world's most popular
online video site, YouTube.
Last week, however, Google agreed a deal to buy Motorola
Mobility Holdings Inc (MMI.N) for $12.5 billion, handing it the
world's leading set top box business which delivers content for
many of the top cable TV companies in the United States.
The headline attraction of the deal was Motorola's huge
portfolio of wireless patents but the set top box business
could help Google transform its TV project by giving it
insights into pay-TV.
Google has not spelled out its plans for the set top box
business, and many analysts expect it to divest the unit at the
first opportunity, having no experience or previous interest in
running a hardware business.
Others believe Google could change tack under CEO Larry
Page, Google's co-founder who took back the reins from Schmidt
in April and has already started a social network to compete
with Facebook while ditching other projects.
"Google describes itself as an opportunistic company. So
while it may not have wanted to buy Motorola's operations, it
may now assess whether retaining these assets can compensate
for the risk of owning them," New York-based Nomura analyst
Stuart Jeffrey wrote in a note this week.
Schmidt made no mention of the Motorola acquisition or its
implications on Friday, but will hold a question and answer
session in Edinburgh on Saturday.
(Additional reporting by Alexei Oreskovic in San Francisco;
editing by David Cowell, Tim Dobbyn and Andre Grenon)