When Google unveiled the combination of the Nexus 7 tablet and the otherworldly Nexus Q streaming device at the Google I/O developers conference in San Francisco, observers couldn’t help but think, “But what about Google TV?”

The answer, I was told by several members of the Android and Google TV teams, involves Google thinking about the problem along a new axis: the social experience.

No, this isn’t the cloud-based “Google Entertainment System” some hoped for. And admittedly, the distinction still feels forced. But here’s the internal logic that drove Google’s decision.

Google TV Is About, Well, TV

As most people know by now, the first generation of the Google TV - as embodied by the Logitech Revue - maintained a rather Googlesque look and feel, emphasizing the Google browser, YouTube and shortcuts to the Web’s most popular video sites. Google employees didn’t use this exact term, but Google TV was itself a “second screen": Users could run the browser within a picture-in-picture (PIP) window, for example, seeking out an actor’s IMDB filmography while watching a movie in the main window. Later, Google TV-optimized apps like Rotten Tomatoes and Google’s own “TV and Movies” offered a more directed guide to the same information. Meanwhile, Equipment makers like LG and Sony began putting their own face or “skin” on the Google TV experience.

The Nexus Q, on the other hand, is not a standalone device; it can’t function without an Android tablet or phone instructing it what to do. Google employees told me that the Nexus Q uses the Android@Home framework that Google talked about at the last Google I/O, but uses a Wi-Fi connection, rather than the proprietary wireless standard Google previously discussed. Fortunately, that means that the 1-to-1 relationship between the Nexus 7 and Q will open up at about the time the Q is released, so as to allow “Gingerbread” (Android 2.3) devices to control the Q.

Nexus Q Can’t Do Much - Yet

But what can the Q actually do? So far, it serves as a shared version of Google’s existing services, Google Music and Google Play Movies. The Nexus Q connects to either an HDTV or speakers (or both) and can play back audio and video. That audio comes from either Google Music or Google Play, but with a twist - any user can add, subtract or adjust the playlist, and any user can play any song or video he or she has the rights to. That means, for example, that a friend can bring a digital version of the latest Rihanna track over to play at a party, or that a rented James Bond flick via Play can take movie night on the road. And those near the Q can launch a YouTube video any time they want with their tablet or phone.

No, there aren’t permissions, or priorities. “If your little sister comes in and wants to play her music, the way you deal with it is the same way you’ve always dealt with it - walk over and bop her on the head,” one Google employee jokingly told me. But this takes fighting over the remote to a whole new level. Groups of friends might never make it all the way through a single song. (Multiple users of Apple TV’s AirPlay feature already face similar issues.)

Simply put, Google TV supplements live TV. The Nexus 7 and Q, on the other hand, make listening to music and watching videos social and on-demand. (The Q does not support live TV.)

A New Approach

To date, Consumers have become used to a company providing a single solution for a single application (AppleTV), for example, or to a family of products scaling up and down over various feature sets and price points, like the Roku product line.

Google has tried a different approach. In a strange way, the distinction is reminiscent of the difference between a netbook and a laptop - one is cheap and optimized, the other pricier and more full-featured. But which is which? Google will charge $299 for the more focused Nexus Q, far more than the heavily discounted $99 Logitech Revue or the AppleTV. (That could be a problem: Netbooks haven’t done well lately even though they’re cheaper than laptops and many tablets.)

For now, the Nexus Q can play only movies rented via Google Play, plus YouTube; it lacks the Netflix app and other video services offered by Google TV and Apple TV. Yes, it’s reasonable to assume that Netflix will eventually appear for the Nexus Q (DRM issues may be the hold up, I’m told). Still, it’s difficult to see why someone would pay $299 per Nexus Q, especially if they want to add multiple Qs to various rooms of their house.

The Nexus Q hasn’t killed Google TV, not yet anyway. But as Google moves further down this social axis, either with updates or additional products, the social aspects may be combined with more traditional television experiences. And given that the Q bears the “Nexus” moniker that connotes Google’s flagship “experience” brand, that could eventually spell the end for Google TV.