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By Carl Howe

At today’s Google I/O keynote, Google announced that it will introduce Google TV this fall in conjunction with Sony (NYSE:SNE), Logitech (NASDAQ:LOGI), and Intel (NASDAQ:INTC). Through Sony TVs and Blu-ray players and new Google-branded add-on boxes, Google TV will bring:

  • Internet video to TV. All of the user-generated and syndicated content Google has spent the last five years aggregating in YouTube will now be available in your living room.
  • The Web to TV. Viewers will be able to go to nearly every address they are used to visiting on their PCs on their TVs using Google’s built-in Chrome browser.
  • Android and Flash to TV. Unlike Apple TV which doesn’t do Web at all, Google’s Android-powered boxes will support Flash, allowing viewers to visit sites like Hulu as well as YouTube and ABC.
  • Google search to TV. Most importantly for Google, Google TV will extend its cash cows of search and search advertising to the living room, bringing new eyeballs and dollars to the search giant’s franchise.

So should cable and satellite companies start folding their tents? Yankee Group doesn’t think so, because:

  • It’s not unique. Most of the functions that Google is pitching here are already available on other set-top solutions, including TiVO and Boxee.
  • You can’t buy it. While this is a disruptive move on Google’s part, the first Google TV products won’t be available until fall, which leaves about six months for managed services operators to reply with new interactive products of their own.
  • Developers can’t play yet. The Google TV APIs won’t be available to developers until early 2011, meaning that add-on applications are still a year away.

Google has a $26 billion war chest and a near-invulnerable search franchise to power this exploration into the living room. Considering that more than 26 percent of consumers would consider canceling their pay TV subscriptions for Internet TV if it provided comparable value*, cable, satellite and fixed line operators should see Google’s move as a threat. The only question is when it will deliver on that threat.

* preliminary data from Yankee Group Anywhere Consumer: 2010 U.S. Survey Suite, Wave 1-2