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February 16, 2007

Is Google Game?

It's been well reported that Google is in talks to acquire in-game advertising firm Adscape Media. More speculation surfaced today as Greg Sterling's blog Screenwerk points to a Red Herring article that attaches the price of $23 million to the deal.

The story is moving along, but as Google is a public company and can't comment due to regulatory issues, no named sources at either company have been able to confirm the deal. ClickZ reached out to contacts at both Google and Adscape Media which have not yet been returned.

For various reasons, many agree it makes sense for Google to get into in-game advertising, and others affirm the choice of Adscape. Sterling offers Google's general range of "Sub-$20 to $30 million" for most acquisitions. And in a Q&A with in-game ad firm Massive's new CEO Cory Van Arsdale published earlier this week, he Google's interest in in-game advertising makes perfect sense, "Google has made investments to try to expand from Web-based advertising in terms of user experience," he said.

The possibility of Google buying up Adscape or another in-game ad firm makes things interesting for its Redmond-based competitor. Massive calls Microsoft's Xbox unit family, yet tries to keep it at arms length in order to do business with competing console manufacturers. If Google moves into the space, it doesn't have a console shackle which could hold Massive back from certain deals.

The Red Herring cites a source saying "an Adscape acquisition gives Google little beyond a few potentially interesting patents," which is a good point. When I spoke to Adscape late last summer, Adscape's VP of marketing Eva Woo discussed an in-game ad unit that behaved a little differently than typical in-game ads, but at the time Adscape was in the process of getting the unit into games. Still, the company has a product, and an experienced staff drawing from the game industry and has Bernie Stolar as its chairman.

Posted by Enid Burns at February 16, 2007 4:56 PM

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