Yahoo and Intel's Web TV widget could be the winner

I have seen the future of television. And I can’t wait to “watch.”

For years, companies large and small have been trying to merge the experiences of watching TV and surfing the Web.

But none have really taken off, largely because the attempts have tried to force the PC-based Web experience – a browser, a keyboard and so on – to the living room. There always been one big problem with that approach: TV viewers don’t want to alter the actual experience of watching TV. Now, Intel and Yahoo have found a way to bring a relevant, personalized Web content to the living room screen via on-screen widgets. In the examples the two companies presented at IDF today, these widgets offer on-screen access to everything from real time sports scores, weather updates and stock prices to online movie rentals, Twiter updates, Flickr galleries and, yes, even commercials.

Here’s a couple of reasons why I'm so bullish on this and think Yahoo and Intel have finally found the right formula for bringing the Web to TV:

• First, the widgets are developed on an open platform, which means developers could bring anything – horoscopes, headlines, comic strips and who knows what else – to the TV in the form of a widget.
• Second, the personalization of the dock (customized by each viewer in the home), allows the viewer to maintain control of the widgets that appear on the screen.
• Third, the Internet is better equipped to track viewing habits, much the way it tracks page views, than the current way TV ratings are determined.
• Finally, Intel and Yahoo have the right idea by bringing in partners that would otherwise make or break this effort - the cable industry, Hollywood content producers and TV manufacturers, among others. Unlike the DVR revolution, which disrupted advertising in a way that scared both Hollywood and Madison Avenue, this approach brings those folks in at the planning stages so they can create new opportunities for their business models.

That’s the Yahoo side, the cool stuff users will actually see on the screen. From the Intel side, the behind-the-scenes technology represents a breakthrough on the hardware side.

As part of the presentation at IDF, Intel introduced a media processor called CE 3100. The chip technology brings 3-D display and graphics technology to the chip to manage things like audio and video, high-def resolutions and seamless fast-forwarding (without dropping frames to skip ahead the way you see in some DVRs.)

The chip technology - that is, bringing the power to the television set itself, as opposed to another set-top box - is one of the key differentiators from past attempts at bringing the Web to TV. And Intel and Yahoo seemed to have the right outlook - because they looked at this from the viewer's perspective. They found that 43 percent of people who watch sports regularly engage with the Internet from a laptop while watching the game (We Fantasy Football players spend Sundays with both the TV and the laptop to keep up what's happening throughout the league.) And to drive home the point that people will bridge the technology and TV divides, the companies reminded us that 97.5 million votes were cast for the season finale of American Idol.

Viewers around the globe love TV and we're always willing to upgrade when we see an immediate return on our investment. Consider the push to color TV in the 1960s. And then there was the cable revolution. TiVo - despite blowing a marketing opportunity early on to become the leader in DVR technology, instead of a pioneer - was an instant success with early adopters. And HDTV is finally hitting the mainstream, as well.

One last thought: it's good to see Yahoo emerge as a partner in this effort. The company certainly has had its share of turmoil in recent months so it's good to see it partnered on something that has potential to be a winner. A Yahoo executive was asked at IDF about monetizing these widgets - a legitimate question. The executive replied that advertising is a core piece of Yahoo's business model and it's expected that this venture would also fuel the advertising side of the business. He's right. Advertising has always been cash cow for newspapers and television. Newspapers continue to struggle with a way to monetize their Web properties. But this may be the way to bring advertising - Web advertising, if you will - back to TV. With an advertising strategy already in place, Yahoo is betting that it can morph Web and TV advertising the same way it's now merging TV and Web content.