There is still a clear North/South divide when it comes to Internet penetration levels in Europe. While all the Scandinavian countries and the Netherlands are highly connected, with penetration rates over 80%, countries in Southern Europe like Greece, Turkey, or Portugal hover around 40%.

Microsoft, however, expects that this will slowly change, as Internet usage continues to grow in Southern Europe, and as the Northern countries reach their saturation levels.

Broadband connections in Europe represent about 83% of all Internet connections, which is far ahead of the U.S., where broadband only accounts for about 70% of all connections.

Online Video

Microsoft assumes that TV, radio, and newspaper consumption, which has been flat in Europe for the last couple of years, will start a slow decline. Since 2004, Europeans are already spending less time on watching DVDs (-16%) and reading magazines (-6%).

By 2010, Microsoft predicts that Europeans will spend an average of 14.2 per week on the Internet, while they will only sit in front of their TVs for 11.5 hours per week.

Currently, about 9% of Europeans watch live TV on their PCs and 4% record TV programs to a hard drive, either through a dedicated media PC or with a DVR. Microsoft, however, doesn't believe that the TV will be left behind. Instead, the company predicts that the traditional TV will morph into an Internet-enabled device that will offer consumers the ability to watch on-demand videos and connect them to their social networks and other online activities.

While many UPnP server solutions already exist for Windows (it’s a pity Google hasn’t targeted Mac users), Google Media Server does bring a few specific features to the table. Namely support for Internet-based content from its photo sharing service Picasa, along with videos hosted on YouTube (using H.264 not Flash Video). From this we can conclude that Google Media Server is designed to make Google’s desktop search application that bit more useful, as well as offer another means of accessing YouTube on a TV.

Of course, Google Media Server could also be another sign that the company is testing the waters for a much more ambitious living room strategy — see Google wants to do for TV what it did for the Web.

This post is syndicated from last100, our digital lifestyle blog covering Internet TV, digital music, Mobile Web and more. You can subscribe to last100 here.

See also last100's recently published guide: DLNA certified: how your computer, cellphone, games console, media streamer and other devices can play nicely together