Internet search meets the gadget

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Internet gearmaker Cisco Systems, notably, spent $6.9 billion in November to buy Scientific-Atlanta, which makes home cable boxes. The combination of Cisco's networking gear and cable boxes could prove powerful. Yahoo, for its part, has already teamed with digital video recorder maker TiVo to allow people to search for and program their show recordings from the Web.

Make no doubt, the high-tech and consumer electronics industries are converging, and Semel and Page's presence at CES underscores that point.

Google cubed?
Certainly, Google is interested in alternative technologies, especially within the wireless market. Last year, it bought upstart Android, a company developing operating system software for wireless devices and whose founder was behind the Sidekick wireless device. Yet Google would be interested only in bringing a device to market if it could cut the current cost models, industry analysts say.

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Sink your teeth into all the news from this week's Macworld Expo.

Rumors about a Google appliance have been circulating for months, if not longer. A top executive of thin-client maker Wyse Technology, told The New York Times that Google has been in talks with his company. "The discussions are focused on a $200 Google-branded machine that would likely be marketed in cooperation with telecommunications companies in markets like China and India, where home PCs are less common," said John Kish, chief executive of Wyse, the Dec. 11 article said.

"We are in very early-stage discussions to explore a potential relationship," Wyse Technology spokeswoman Laurie Garvey said in an interview with CNET News.com. She said it is too early in the process to provide any further details.

A Google representative said she had no information about any Wyse discussions but that she would look into it.

Speculation spiked with a column by Robert X. Cringely in November in which he forecasted that Google will create distributed data centers in shipping containers that would be used to link up " Google Cubes."

The Google Cubes, he describes, are plug-and-play devices that would serve as the company's "interface to every computer, TV and stereo system in your home, as well as linking to home automation and climate control...(and) are networked together wirelessly in a mesh network, so only one need be attached to your broadband modem or router."

He cites no source for his prediction, and said in a telephone interview with CNET News.com that he doesn't expect Google to announce its mystery boxes at CES. If they do something within the next year, he speculates that the search giant will partner with a manufacturer that would build the device. Build Google factories? Not a chance, he said.

"At some point they're going to buy these things from someone," Cringely said. "They wouldn't risk their (profits) on something like that."

Bear Stearns analyst Robert Peck referred to Cringely's prediction in a research note dated Dec. 19. "Through recent conversations with a technology pundit, we think Google could be experimenting with new hardware endeavors that could significantly change potential future applications by Google, creating another advantage for Google over its competitors," the note said.

The Los Angeles Times cited the Bear Stearns report in an article Sunday providing its own predictions for 2006.

"Google will unveil its own low-price personal computer or other device that connects to the Internet," the article said. Citing unnamed sources, it also said Google and Wal-Mart Stores were in talks to deliver the inexpensive hardware, infused with a Google operating system and applications.

Both Google and Wal-Mart representatives denied the rumors. "There's no truth to it whatsoever," a Wal-Mart spokeswoman said. Google issued this statement: "We have many PC partners who serve their markets exceedingly well and we see no need to enter that market; we would rather partner with great companies."

Google already offers a search appliance tailored for business use. The Google Mini combines hardware and software to index documents on a company's internal or external Web sites.

Such news inevitably gooses Google's stock price.

On Tuesday, Piper Jaffray analyst Safa Rashtchy raised his price target for Google to $600 a share for the next year, reflecting a 50 times price-to-earnings forward multiple. Google was trading at $435.23 per share at the end of trading Tuesday. Rashtchy predicted the company will grow faster than the paid search market, which is already expected to grow 40 percent this year.

But bullish as Rashtchy is about Google's stock, he's skeptical it will build some sort of consumer device. "The history of appliances, net appliances or otherwise, has been checkered at best," Rashtchy said. "If Google does really have a product, it really better simplify the challenge" of converging Internet with television and home entertainment.

CNET News.com's Michael Kanellos contributed to this report.

[joemill1]

not worth their weight in gold

its my opinion that google should stay ion the search business and leave the lesser non leveling business ventures to that of microsoft so they can finally get a good idea out there

[ajsnyc]

successful product not taking fire

I am bewildered and worried that webtv has never o'ertaken the general population which has paid MUCH MORE for their computers which require so much diligence and administrative time. Webtv is streamlined, fast, unproblematic and provides me with 98% of my internet needs. I go to my far fussier, slower, complicated and vexing computers to do things like download pdf files or see videos. MSNTV alas offers a new product which however craftier actually does LESS than the original. My grave suspicion is that Microsoft purchased the product to eventually put it out of competition with their products which will forever gather in monies for changes, enhancements and upgrades.