CES: Microsoft does away with the DVR, partners with Verizon for search

“If you think about TV over the last few years, it has become really complicated,” Reinman said. “There are all these add-on things like DVR, being able to go to the Internet if you missed your show and catch up on the Web. There are all these accommodations for people’s schedules, but these features are making TV simple again and bringing it back to TV on your schedule. Over time, as more and more consumers begin to use this, we’ll potentially see less DVR usage and fewer situations where people have to compromise and watch something online because they missed it.”

Microsoft is also demoing new concept apps built around Mediaroom, including a partnership with the BBC and popular automotive show Top Gear to integrate online content with the show itself, as well as a TNT app with the Professional Golfers Association and Red Carpet app with the Associated Press to delve deeper into the celebrities and events on the TV set itself.

“The key thing is that concept pieces could be coming from the cloud or the Internet, but they are brought into the IPTV experience,” Reinman said. “It’s seamless high-quality managed experience as opposed to streaming in content from the Web and getting what you get.”

Concurrent with Ballmer’s keynote, Verizon also announced its selection of Microsoft to provide portal, local and Internet search as well as mobile advertising services on its wireless devices. The five-year agreement will commence in the first half of the year, as soon as Microsoft Live Search becomes available on Verizon’s new feature phones and smartphones, the carrier said. With Live Search, consumers will be able to access context-relevant search results through voice commands or typed queries, even integrating location for local searches. Microsoft will manage search and display advertising on Verizon’s mobile web service. Verizon’s competitors AT&T and T-Mobile both rely on Yahoo for search, while Sprint partners with Google for the service.

The deal is significant for Microsoft, which has been losing an all-out race against search-leader Google. Microsoft closed out 2008 with a decline in its Windows Live Search and only 9.1% market share in the U.S. in November, according to Neilsen Online. Google, meanwhile, captured 64.1% market share and Yahoo had 16.1% share of the market in November. Financial details of the partnership were not discussed, but it is believed to be the largest mobile search and advertising deal to date.

Microsoft’s wireless announcements did not include a Zune phone, as many had anticipated. However, Ballmer did note that 11 different Windows Mobile phones have each sold more than 1 million units in 2008, and Microsoft’s carrier partners have sold more than 20 millions Windows Mobile handsets in the past year.