Should Microsoft Just Buy Boxee And Compete With Google TV?

Did Google miss a critical opportunity? Some might say they did. Googlehas obviously capitalized on quite a number of market openings, pavingthe way for true smartphone competition with Android, putting Yahoo! andMSN on their toes with Google search, and putting Yahoo! Mail as wellas Hotmail on guard with Gmail. And that's just the beginning. Google isalso doing their best to bring cloud applications into the mainstream,with the Google Document suite putting serious pressure on Microsoft'sOffice suite.

But no one needs to tell you that Google is on top of their game. Googleis even looking to revolutionize the television industry and contentdelivery business with Google TV.  In fact, some might say that they havetheir toughest climb yet with that one. They're battling against pay-TVproviders (think of it as a cold war), as those who provide content overfiber and/or coax certainly don't want all of your content to simplystream in via the Internet. It still remains to be seen if Google istrying to start a new revenue stream or simply take advantage of the upside adsales potential on TV as a medium, but one thing struck us right away when thecompany began to detail the Google TV platform. WithGoogle recently snapping up AdMob and a number of other small companies,it's clear that the company isn't scared of spending money. So it hadto cross their mind that Boxee is ripe for acquisition.  And given thatjust about everyone in the market that would be interested in Google TVis also well aware of the successes of Boxee.tv, it would've also given Google some positivepress despite some of the confusion of what they're really aiming for withGoogle TV.


As it stands, Google instead chose to partner with Intel, Sony, DISHNetwork and Logitech, all fine companies. But they lack something thatBoxee has: freshness and innovation with a new face on mainstream content. Boxee's delivery methodis second-to-none, and anyone viewing content heavily via a PC isprobably using Boxee or has Boxee installed in order to quickly andeasily access their favorite Web-based material. So why would Googleleave a main competitor on the table, when this was seemingly theperfect opportunity to integrate Boxee's services in with Google TV?

Not like it matters now. Google's going at this with their own selectionof partners, and there's likely no changing course. So, with Boxeestill out on the market, there's an 800lb gorilla in the room that wecan't ignore. It's Microsoft, and since Google passed up what seems likea great chance to really forge ahead with a service that integrates thebest of Boxee with the best of Google, we're wondering if Microsoft isseeing what we're seeing. Google and Microsoft already compete in anumber of areas: search, ads, smartphone operating systems, desktopoperating systems, web browsers, and the list goes on. Why not add onemore? Microsoft has been active in the alternative television space foryears now, most recently with Windows Media Center, Media Center Extenders, their Internet TV offering in Windows Media Center and CableCARD support. Most HTPCs that don't rely onLinux/Myth, rely on Microsoft products, but the company has been unable to reallyexploit this market. High-end installs may rely on Windows Media Center,but average consumers can easily be daunted by the complexity of setup. And with all of those DRM loops holding things up further, it's easyto see why the standard pay-TV approach, as old as it is, still remainsso very popular globally.

But alas, let us not forget about that huge install-base of Xbox Live users, who could easily and immediately benefit from a Boxee-infused content delivery system by Microsoft and tailored specifically for their own game console...


Microsoft still has a great deal of expertise in this space, and theyhave a long list of industry partners that would probably jump atthe chance to rival Google and become "the next big thing" in TVdelivery. Imagine a Microsoft-based middleware service in place ofwhatever is currently on your cable set-top box. So instead of usingsome slow, inflexible OS to attempt to record shows and manage DVRspace, you'd have a sleek, 1080p Microsoft interface, one's that able toeasily integrate with networked PCs and networked storage. You couldeasily pull together content stored locally, on a network, from yourpay-TV provider, and from the Web.

And better still, there's Xbox Live and Netflix integration, two more critical items that Microsoft already has under their belt. Now, Google could easily integrate a Netflix search into their own offering since it's an open API that has also been adopted by Roku, Nintendo and Sony, but still, Microsoft has proven that it has an interface that works and people are willing to pay for. On top of that, there's Microsoft's own Xbox Video Store, yet another place where users can search for content to download. Obviously this gets a bit complex with all of these different venues to fetch media, but having Boxee as a central UI would allow those various portals to be assembled in a central, easy-to-navigate location. Of course, all of this brings up another point: Microsoft doesn't even need a set-top box vendor. They already have a perfect usable device in the Xbox 360, which retails for under $200 today. Most Media Center Extenders were around $200 at launch, so the value proposition of getting a unified pay-TV/programming set-top box and a game console for $200 is excellent. Google can't offer that, but neither can Microsoft without Boxee (or something similar).


Sounds like a plan, doesn't it? But Microsoft needs help with that lastaspect, and Boxee could make Microsoft a contender today. Hardly anywait would be needed; a Boxee for Windows build is available now, as arebuilds for OS X and Linux. A Boxee buyout by Microsoft would allow thecompany to immediately integrate a best-in-class Web content deliveryservice with a best-in-class media center service, and the Boxee namealone would allow Microsoft to rival Google TV in a way that they couldnever do alone. D-Link's Boxee box could even be updated to do whatLogitech's Google TV set-top box will do this Fall, and all of theconnected HDTVs in the pipeline from Toshiba, Vizio, Sharp, LG andothers could easily be tweaked to run a Microsoft/Boxee app that couldpull down content from the Web, from your networked storage servers,from your pay-TV provider, etc.


Microsoft is in a tough position if they were to try to rival Google TVtoday. Google TV will be available in a few short months, and thatleaves Microsoft with little to no time to develop a softwarealternative, rally partners and implement a solution to the market.Acquiring Boxee would accelerate the plan in a way that Microsoft may beable to have something similar out by Q4.  The most crucial aspectis that only DISH Network (of all the pay-TV carriers in America) hassigned on with Google. That leaves TWC, Comcast, Cox, DirecTV, and abunch of others ripe for the picking. It's pretty much now or never forMicrosoft, and it looks like an acquisition of Boxee would be thequickest way to get on that track. We aren't certain this situation willever play out, but could anyone argue that the whole situation ofnext-generation TV would be amped up a few levels in terms ofexcitement if indeed it went down?