TOKYO (Reuters) - Web giant Google Inc is developing televisions that display Internet content such as photos and videos together with Matsushita Electric Industrial Co Ltd's Panasonic unit.

The TVs, to be launched this spring, will allow users to directly browse and access videos from YouTube, a video-sharing Web site owned by Google, and view Picasa Web Albums, a free online photo-sharing service from Google, Panasonic said in a statement on Monday.

"Panasonic's cooperation with YouTube and Google's Picasa Web Albums exemplifies our commitment to leading the natural evolution of the Internet and extending it to the High Definition television," Panasonic Consumer Electronics Company's Vice President Merwan Mereby said in the statement.

The news sent the shares of Matsushita higher right after the market open, but they shed 1.8 percent to 2,150 yen by 8:08 p.m. EST to underperform a 0.7 percent fall in the benchmark Nikkei average.

Late last year, Matsushita, the world's top plasma TV maker, said it would take control of a liquid crystal display joint venture and may build a new factory, marking a major shift in its strategy for the flat panel TV market.

Matsushita has until now invested aggressively in plasma displays in the belief that it was the most cost-effective technology for flat TVs bigger than 37-inches, while procuring LCD panels to make TVs for the smaller sets.