Google's dominating the smartphone market. Now the company looks to take on the smart-TV market. Hence, Google TV. A mouse, a keyboard and a Google box turns your TV watching time into TV/Web browsing time. Google TV is a bit like a new interface for your television. Rather than a cable menu, it's a Google search bar. Enter, say, "Lost" and it finds episodes, IMBD pages, fan sites and maybe that Coldplay song. The video below explains more.
It sounds like a sensible move. But I need some time to think about whether I'd prefer to have an Internet-abled TV or an Internet-abled laptop on my lap while I watch TV.
In any case, smart TV is a smart move for Google. The worldwide TV ad market is $70 billion. Getting your proprietary software in front of those eyeballs is a good way to steal a slice of that pie.