Since the mid-90s when they launched a 24-hour cable news network and purchased WebTV, Microsoft has been trying to figure out how to marry television with the Internet (see our full history from July). Now, a decade later, they may finally be gaining some traction.

BusinessWeek reports this morning that though only about 500,000 homes get TV service over the Internet from phone companies using Microsoft software, the company’s IPTV efforts appear to be gathering significant steam. AT&T’s U-Verse IPTV service has grown from 51,000 to 126,000 customers over the last quarter and should be available to 8 million homes by year’s end. Swisscom has signed up 50,000 customers for its Microsoft-powered service (about 1.6% of the Swiss TV market). British Telecom, meanwhile, has designs to sign up 2-3 million IPTV customers within the next 5 years, on the back of Microsoft solutions.

This post was originally published on Read/WriteWeb on May 15th, 2007.

A new study from Forrester Research predicts that online video download services will see sales peak this year, as consumers move other sources of online video. Read/WriteWeb recently reported that CBS is increasingly releasing content for free or via ad-supported mediums such as, Joost. Further, consumers are confronted with a growing number of video-on-demand options from their cable or satellite providers and Internet services.

Though sales of television and film downloads via services like iTunes and Amazon Unbox will nearly triple this year, according to the report, it is unlikely that such services will see much growth in 2008 and beyond unless the market shifts dramatically.

This post was originally published on Read/WriteWeb on May 14th, 2007.

Last May CBS launched Innertube, an online video site that would allow the network’s viewers to watch popular television shows like “CSI” and “Survivor” online for free, as well as bonus content and original mini shows. The site, which was ad supported and used RealPlayer, was ill-conceived from the start since it was put to head-to-head with arguably more attractive offers from CBS (99-cent commercial free downloads of Survivor, and free, sans-commercials on-demand content for Comcast cable subscribers). Eventually CBS also offered content for download on iTunes and clips via YouTube, leaving Innertube in the dust.

But now, CBS has decided that forcing users to come to them just doesn’t work, reports the Wall Street Journal. Beginning this month CBS will start to distribute their popular content over ten different online destinations, including AOL and Joost [Ed. see our Joost review], as part of a new initiative called the CBS Interactive Audience Network. The company is also reportedly working on deals with web 2.0 sites like Facebook, Last.fm — which recently announced it was adding video, and Slide to distribute their video content over social networks.