TiVo: What’s Next In A Google TV World?

A day after Google (GOOG) launched its TV initiative to great fanfare, it’s reasonable to wonder what impact the move could have on TiVo (TIVO).
The DVR pioneer was already in a tough position following a decision by the U.S. Court of Appeals to rehear an appeal in the company’s long-running patent litigation with Dish Network (DISH) and Echostar (SATS). Shares have tumbled nearly 50% since the May 14 ruling.
Now the question is can TiVo compete in the same arena as Google. Tony Wible, an analyst at Janney Montgomery Scott, says there are still a few factors working in TiVo’s favor.
In a research note Friday, he writes that TiVo is a natural acquisition for Google, “as a means of accelerating its TV ambitions.” Alternatively, given the threat posed by Google in the living room, Microsoft (MSFT) or Cisco (CSCO) could become interested buyers.
Separately, Wible thinks the cable operators could further align themselves with TiVo’s product, to try to fend off the Google threat. While Google TV could push viewers away from cable offerings, TiVo does less to challenge the status quo, Wible says.
He maintains a Buy rating and $24.50 price target on TiVo shares.
TiVo closed up 20 cents, or 2.3%, Friday to $9.04.