The Consumer Electronics Show in Las Vegas may feature an entrant in the new gadget arena with a big G on the side of the box; we’re guessing CPM ads will be a feature in the Google Box too.
Will Google push aside the in-home media center desires of Microsoft? Does the future hold a lot more CPM advertising for Google? Tell us what you think at WebProWorld.
It looks like Cringely was right. The Los Angeles Times has reported Google may use Larry Page’s Friday keynote address to disclose the Google Box to the world.
Hardware margins in the PC industry run exceedingly thin thanks to the dominance of Dell and the low cost of computer components. Profits from hardware don’t look to be the likely motivation for Google to unveil this Box.
Instead, the answer may have been demonstrated by Google’s recent widely-seen rollout of Ford Explorer ads on numerous sites displaying Google AdSense advertising.
Those ads were priced at a cost per impression (CPM) basis rather than the typical cost per click (CPC) model, and they would have cost Ford more than CPC ads. If the response to those Explorer ads proved successful for Ford, and profitable for Google, it would be logical to see content delivered via a Google Box carrying CPM advertising.
The Times article cited sources who claimed Google has been in close discussion with world retailing giant Wal-Mart to be one of the sellers of the device. The Times also noted analysis by Bear Stearns that the Google Boxes were in development.
These devices would function as the central point for collecting content like music, video, and other items from the Internet, then allow it to be rendered on TV screens or computers connected to the Google Box.
The impact of a Google-connected device coupled with its online services like video or music search could be felt by the likes of Google partner Comcast and others:
Content producers wonder whether Google’s push into video search will unravel the economics that make Hollywood hum. If viewers can find and legally download an episode of “Seinfeld” through Google, will that cut into cable and network television’s profits?
And what if Google, after equipping cities, starting with San Francisco, with Wi-Fi wireless technology, starts to offer pay-TV service for free?
Those are interesting points made in the article, but neither addresses the main question: how does Google make money with the device? CPM ads look like the answer.
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David Utter is a staff writer for Murdok covering technology and business.
