The news hit Monday morning that Google has decided to delay the release of its Google TV platform, and has asked its OEMs to delay any products that embed the software.  Coming just about two weeks prior to the 2011 Consumer Electronics Show (CES), Google’s timing is about the worst imaginable.  CES is where the platform should have had its coming out party, especially given all the anticipation that has built up since its initial announcement came 7 months ago.

At last year’s CES, it seemed every consumer electronics company had fashioned its own software stack for Internet-based video programming and applications/widgets on its TVs, optical disc players and set top boxes.  In one case, I even saw two platforms on a single TV set (one provided by Yahoo and the other one native to the TV set).

The whole point of Google TV was to solve this problem and offer a standard, embeddable platform.  But that won’t be happening, at least not for a while.  Google seems unable to get it together, and more proprietary approaches, like Apple TV, don’t seem to be setting the world of TV-Internet convergence on fire, either.

It seems to me, that when it comes to building a “TV operating system,” Windows Media Center is still the best of a bad bunch.  But it won’t stay so for much longer without some changes.  Will Redmond pick up the ball that Google has fumbled?  I’m skeptical, but hopeful.  Regardless, here are some steps that could help Microsoft make the most of Google’s faux pas:

• Introduce a new Media Center version that uses XBox 360, rather than Windows 7 (or 8), as the platform.  TV platforms should be appliance-like, not PC-like.  Combine that notion with the runaway sales numbers for Xbox 360 Kinect, and the mass appeal it has delivered for Xbox, and the switch form Windows makes even more sense. As I have pointed out before, Microsoft’s Xbox implementation of its Mediaroom platform (announced and demoed at last year’s CES) gets Redmond 80% of the way toward this goal.  Nothing stops Microsoft from going the other 20%, other than its own apathy, which I hope has dissipated.
• Reverse the decision to remove Drive Extender technology from Windows Home Server (WHS), and create deep integration between WHS and Media Center.  I have suggested this previously as well, but the recent announcement that Drive Extender would be dropped from WHS 2.0 creates the need for me to a) join the chorus of people urging Microsoft to reconsider and b) reiterate the importance of Media Center-WHS integration in the context of a Google compete scenario.
• Enable Windows Phone 7 (WP7) as a Media Center client.  This would tighten the integration loop already established between WP7, Xbox and Zune.  But it would also counter Echostar/DISH Network/Sling Media, strike a blow against Google/Android (and even Apple/iOS) and could be the final strike against TiVO.
• Bring the WP7 user interface to Media Center and Kinect-enable it.  This would further the integration discussed above and would be appropriate recognition of WP7’s Metro UI having been built on the heritage of the original Media Center itself.  And being able to run your DVR even if you can’t find the remote (or can’t see its buttons in the dark) could be a nifty gimmick.

Microsoft can do this but its consumer-oriented organization, responsible for Xbox, Zune and WP7, has to take the reins here, or none of this will likely work.  There’s a significant chance that won’t happen, but I won’t let that stop me from hoping that it does and insisting that it must.  Honestly, this fight is Microsoft’s to lose.