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TiVo Developing Advertising Search Feature

November 29, 2005|From Reuters

TiVo Inc., the company that made its name by letting users skip television commercials, said Monday that it was working on technology to let viewers search for specific advertisements.

Expected to be launched in early 2006, TiVo's technology is among the advertising industry's latest efforts to reach consumers using high-tech products to escape the traditional ad pitch.

Marketers and technology companies targeting consumers distracted by these new outlets are looking to take a page out of the playbook of companies such as Yahoo Inc. and Google Inc., where online advertising is growing far quicker than in traditional media.

TiVo said it was working with several large advertising companies on the feature, including Interpublic Group of Cos.' Interpublic Media, Omnicom Group Inc.'s OMD, Starcom Mediavest Group, Richards Group and Comcast Corp.'s Comcast Spotlight advertising sales division.

The advertising service will let subscribers search for a product by category or keyword, then TiVo would deliver matching commercials to the consumer's set-top box.

The Alviso, Calif.-based company's development of new advertising models has been one of the key incentives to cable companies in signing a deal with TiVo, analysts have said.

However, Monday's deal, following another with Yahoo and the introduction of a new feature to send recorded videos to Apple Computer Inc.'s iPod music and video player, failed to excite Wall Street.

"I continue to question whether any of these initiatives are going to be accretive to shareholders," said April Horace, an analyst at Hoefer & Arnett Inc. "I don't see the revenue opportunity anytime in the near term."

TiVo shares fell 21 cents to $5.73.

TiVo said the financial model of its new service had yet to be worked out, but suggested that it probably could borrow a few ideas from the Internet.

"We have all the capabilities of measuring what the consumers [are] doing. We could do a click-per-view," Davina Kent, TiVo's manager of ad and research sales, said in an interview.

In click-per-view advertising models, TiVo, much like websites, would be paid by the number of times a commercial is viewed, how long a viewer watches the ad and whether the viewer seeks additional information from the advertiser.

What's unclear is why TV viewers, empowered by the very company that made ad-zapping a national pastime, would suddenly go seeking commercials.

TiVo's Kent said viewers could be attracted to a more "robust message" than what marketers can deliver on websites.

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