Microsoft News Tracker

Ryan Olson at Red Herring:

Google has made a foray into in-game advertising for video games with an agreement to acquire Adscape Media for $23 million, sources familiar with the matter said Thursday.

The move comes after news broke last month that the Internet advertising giant was in the final stages of buying the startup, a deal that could give Google an entry point into a new advertising category.

Adscape competes with the much larger Massive Inc. that Microsoft acquired in April 2006. In fact, it’s not entirely clear what Google is getting for its money:

But sources familiar with the in-game ad business said an Adscape acquisition gives Google little beyond a few potentially interesting patents. While market conditions could change rapidly, don’t expect the Internet giant to announce big in-game ad deals with publishers like Electronic Arts anytime soon.

And big deals with EA are just the kind of thing that Massive does.

Update 3/19/2007: Deal formally announced.