After testing newspaper ads and radio ads, Google moves to a higher dimension: TV ads. Wall Street Journal reports that there's already a pilot program with a cable company in California, Astound Broadband.
Forbes gives a possible motivation: "Internet search advertising is a $15 billion business, of which Google has a two thirds share. However, TV advertising in the U.S. is a $54 billion market."
At a Morgan Stanley conference, Eric Schmidt said that the TV ads are inefficient because they are poorly targeted. People see ads they have no interest in and change the channel. "Schmidt told the conference that the next generation of digital set-top boxes would be addressable Internet devices, which would present a huge opportunity for targeted advertising."
The pilot program is "is aimed at testing the computer and network infrastructure needed for Google to broker and deliver commercials to cable systems more widely. In the test, advertisers are buying commercial placements through an auction system, people familiar with the matter say. But it is at an early enough stage that the buys are being handled manually by Google salespeople, rather than through a full-fledged automated auction like the one Google uses to sell ads online, one of the people says."
In a not-so-distant future, when Internet and TV become closer, Google could become a search engine for TV shows and serve targeted ads based on the content you're watching, location and the information from your Google account.