Google looking to buy in-game ad firm?

[UPDATE] The Wall Street Journal reports that the search giant wants to expand its business into video games; source calls deal a "mismatch."

Google could be in negotiations to buy San Francisco-based Adscape Media Inc, according to a report from The Wall Street Journal Online. The report lists sources as saying that the deal could be concluded as early as next week.

The deal, if successfully completed, could mean that Google would offer its hundreds of thousands of current advertisers the opportunity to also place ads within games.

In-game ads have been attracting more and more interest recently. Ad firm IGA Worldwide announced an agreement with Valve to provide "dynamic advertising" in the first-person shooter Counter-Strike in December, and Microsoft acquired in-game ad company Massive Inc for almost $200 million in May.

Adscape was founded in 2002 by former Nortel engineer Dan Willis, who was joined in 2006 by two former Sega executives, Bernie Stolar and Chris Gilbert. Stolar had previously been the president and COO of Sega America, and Gilbert was executive vice president of Sega's sales, marketing, and operations division. The company bills itself as "Real Advertising in the Virtual World" and uses a technology it calls RVG--Real World/Virtual World Gateway--which allows for two-way text, audio, and video communication to unlock rewards, download music, or enter sweepstakes.

However, the report quotes Adscape chairman Stolar as commenting that he had "spoken to every major player" about the possibility of a company acquisition but that no such deal was yet in the cards.

[UPDATE] A number of industry sources, speaking with GameSpot on background only, lent additional credibility to the rumors, but none of those sources saw much of an upside for Google, one going so far as to call the sale--which they called "95 percent likely"--a "mismatch."

Selling games is a "high-touch sale," the game industry exec said. Most publishers want approval over ads that appear in their games, and conversely, marketers want to know about the specific games their ads are appearing in--are cops getting blown away, are cars being destroyed, are violent acts being rewarded. Given the Google approach, regardless of the specific business model, is one based on automation, this exec sees a substantial disconnect in the acquisition.

Another source called the rumored deal a "fire sale." Stating the technology owned by Adscape has never been deployed, the source adding "this is not an asset sale, nor are they [Google] buying any publisher relationships...Google is not buying a business team and they [Adscape] don't have any ongoing revenue or income."

What Google does get, however, is a number of patents owned by Adscape, a technology team (based in Canada), and a client application for ad serving into games--which may be enough for the deep-pocketed enterprise with a penchant for acquisitions and a commitment to further building out an ad-based business. That goal was confirmed by a Google rep who yesterday told the Journal the search giant is "always considering new ways to extend Google's advertising program to benefit our users, advertisers and publishers...In-game advertising offers one such possible extension among many others."

An Adscape rep contacted today declined to comment on the alleged negotiations. Calls to Google staffers close to the acquisition also did not return calls.

64 Comments

  • cjcr_alexandru

    Posted Jan 23, 2007 9:29 am PT

    Ads...again.

  • SumerianDaemon

    Posted Jan 23, 2007 8:38 am PT

    Advertising takes every business its involved to another level!
    More money in the gaming industry!BUT they have to show respect to the gamers.....viewing of adds should be OPTIONAL!

  • Gigagamer2

    Posted Jan 23, 2007 8:14 am PT

    advertising isnt bad as long as it is kept well controlled

    -it should be interesting, ie coca-cola logos on cans or sony logos on tvs, or ipods. not just hoards randomly placed in the environment

    -it should not be mentioned by a character in the game randomly, the last thing i want to hear when im sneaking up on someone saying coke is the best or i want a bravia tv. i dont mind however if a character says can you get me a coke (not coca-cola)

  • gatsbythepig

    Posted Jan 23, 2007 7:02 am PT

    as much as I hate it, if google is doing it, it is time to invest

  • Dolacide

    Posted Jan 23, 2007 1:21 am PT

    Bombarded with more advertising, it never ends.

  • TryMe01

    Posted Jan 22, 2007 10:34 pm PT

    this shouldnt happen unless games will actually fall in price, which doesnt happen...

  • robfield

    Posted Jan 22, 2007 8:05 pm PT

    Next...the world

  • Titanfan2083

    Posted Jan 22, 2007 7:12 pm PT

    STAY OUT OF GAMES !

  • LoWpS

    Posted Jan 22, 2007 6:36 pm PT

    imagine pop-ups showing up and blocking the screen during a tense moment in a thrilling FPS... crap!

  • ImperialPanda

    Posted Jan 22, 2007 5:40 pm PT

    Play 15 minutes of WOW and then watch a 5 minute "commercial break."

  • PainKiller_25

    Posted Jan 22, 2007 5:28 pm PT

    But google is an evil empire

  • h4xx0rz

    Posted Jan 22, 2007 5:04 pm PT

    Strange... the most in-game advertisement I've seen is simply in NASCAR games, where every single car has at least one brand name on it. The race tracks also have logos and brand names... then again, I don't think I'm playing the games that you all complain about.

  • mjwickstrom1

    Posted Jan 22, 2007 4:53 pm PT

    I don't want any more in game ads, especially if they're from Google. They're annoying enough already!

  • doolies

    Posted Jan 22, 2007 4:52 pm PT

    I'll take ads in my games. If they bring the cost of games down significantly.

  • Re_ensurer

    Posted Jan 22, 2007 4:30 pm PT

    I wonder who's going to take the offer.

  • Jaeme

    Posted Jan 22, 2007 4:19 pm PT

    I really do not want ads to be a bigger part of gaming. To much of it is money first gaming fun second. I found some ads ok, like billboards in a racing game, but Burger King Fight Night Round 3 was way too much. If I have to put up with ads I had better be getting one very serious break on the cost of the game. I`m not paying $60+ AND being adified.

    The only hope I can see is that they tried the same thing with albums back in the`80s and it flopped. Sigue Sigue Sputnik`s Flaunt It had ads between songs. It never happened again. Maybe that could happen here?

  • Omega3210

    Posted Jan 22, 2007 4:15 pm PT

    goooood luck google

    I'm waiting

  • Gmacrusher

    Posted Jan 22, 2007 4:13 pm PT

    All i have to say is good luck!

  • YukoAsho

    Posted Jan 22, 2007 4:03 pm PT

    jknight - This is why you block said game on your firewall. If it requires internet registration for single player, well... That's one game I won't buy.

  • MRD3ADmach4

    Posted Jan 22, 2007 4:03 pm PT

    Ads in games are stupid I mean I guess in some games your gonna see it like racing and sports games and anything made by EA, but I dont like the idea much. I dont care too much so long as there arent ads for coke popping up in Halo 3 and such. But ads are everywhere already do we really need em in games I mean enough is enough.

  • jknight5422

    Posted Jan 22, 2007 3:22 pm PT

    For a single-player on your game, will you accept your computer going out to pull ads to put in the game while you are playing it? I think that is one of the goals here.

  • soulessblade

    Posted Jan 22, 2007 3:05 pm PT

    For me it depends on what they define as advertising. If it's pop-ups or anything at all that interupts gameplay, then no, absolutely not. However if it's in the background of cutscenes or on billboards in cities, etc, then I don't have a problem with it. In fact it can add a nice real-world touch.

    What I do have a problem with is the fact that add-laden games can still cost upwards of AU$120 here in Australia. That sux. Advertising revenue should lower the production costs of games.

    It's not like this is a new issue though. I remember the "Fujitsu" billboard in the background of Rolento's stage in Street Fighter Alpha/Zero 2.

    Kudo's to the person who said that advertising in MMORPG's like City of Heroes/Villians should remove the need for subscription fees.

  • GyRo567

    Posted Jan 22, 2007 2:40 pm PT

    Ads don't belong in games. Period.

  • comthitnuong

    Posted Jan 22, 2007 2:18 pm PT

    I don't mind in game ads too much so its alright if I see some google once in a while

  • ScreamDream

    Posted Jan 22, 2007 2:05 pm PT

    I have no problem with in game ads as long as they are short and free for online play.

  • paranoiasurviva

    Posted Jan 22, 2007 1:38 pm PT

    Well, if it keeps the costs down, I'm fine with it.

  • ultimate_zero

    Posted Jan 22, 2007 12:56 pm PT

    I was flipping channels and I saw this on CNN, News travel Fast.

  • datniccah187

    Posted Jan 22, 2007 12:34 pm PT

    In game adds suck pretty bad, google needs to simmer down with all trying to purchase in-game ad firms and worry about online searching, not videogames. They have no reason to get into the market if all they want to do is make money from in game ads. Thats messed up!!

  • n_gc6

    Posted Jan 22, 2007 12:25 pm PT

    it would be like billboards. Hasnt anyone ever seen adds in CSS or CS1.6? theyre generally billboards. I dont mind it when theyre like tht, especially if they will lower the price of games.

  • mkirklions

    Posted Jan 22, 2007 12:23 pm PT

    Runs...
    Great...
    On...
    *chimes*
    Pentium 4 processor

    Battle field 2 or battle for middle earth 1, oh they are both made by... EA

  • Caliban360

    Posted Jan 22, 2007 12:14 pm PT

    I guess Ads-in-game are mostly for online games?
    It seems kinda stupid to connect a SP game to internet just to download ads.
    Personally i would just block it with my firewall to have less loading time.
    But if it were, lets say a billboard, in Battlefield 2142 telling you to drink Coca-Cola, i wouldn't mind it, if it made the game cheaper (So long it didn't extend the loading time with all that much).

  • xmg0

    Posted Jan 22, 2007 11:48 am PT

    I really want to see the first game to have its price lowered because of in-game ads.

  • LexLas

    Posted Jan 22, 2007 11:43 am PT

    Would it be like billboard during racing games, or say like a blimp across the sky while your racing in a game ?

  • Ryu

    Posted Jan 22, 2007 11:35 am PT

    Dude...Google ads are already everywhere on the internet. I really don't need to see them in say...GTA 4 to be reminded that they exist and they're the largest multi-purpose web engine on the planet. Geez. =/

  • nekootoko

    Posted Jan 22, 2007 11:31 am PT

    This is crap. If this happens, either the price of games goes down significantly or I never buy one again; if I were forced to wait 5 seconds after each level to see some lame ad, I expect that game to be free or under 10$, because the advertisers are paying for it anyways. A few ads on billboards on some MMORPGs/during loading screens wouldn't be so bad, however, if it interferes with game play I'm officially pissed.
    The only thing that's good about this? It makes MMORPGs with no monthly fees possible. Look at a few "buy sony" eyesores during City of Villains and stop paying.

  • n_gc6

    Posted Jan 22, 2007 11:29 am PT

    i dont think its that google will advertise itself Szindragon. Google advertise other companies, thats where they get money from; they wish to expand their advertising of other companies into gaming = more money.

  • goddessakasha

    Posted Jan 22, 2007 11:28 am PT

    lol.... Google isn't advertising for themselves, you dolt. They are the medium for advertisers.

  • szindragon

    Posted Jan 22, 2007 11:17 am PT

    Mind you, I have no problem with in-game advertisement, but does Google really need to advertise? I mean, it's Google. Everyone already uses it, it's worth a bagillion dollars as it is. Next, Google will create a gaming console.

  • FrankieLA

    Posted Jan 22, 2007 11:13 am PT

    in-game ads will be more and more prevalent. we may as well deal with it. multinational corporations with a bank-load of money has more power than a few hardcore gamer rants.

  • funhabbit

    Posted Jan 22, 2007 11:08 am PT

    Don't we pay for the video games to keep this type of thing out? Unless it's a sport game or something where the ad fit's in with the game environment i don't think gamers want or will accept it.

    I think a game could get bad sales if they tried too hard to include ad's everywhere.

  • neerajkumar_4

    Posted Jan 22, 2007 11:06 am PT

    omg!! google

    KBenDeBeste;"
    .... next thing you know you have a comercial break in a video game......"

    exactly dude..

  • KBenDeBeste

    Posted Jan 22, 2007 10:54 am PT

    .... next thing you know you have a comercial break in a video game......

  • InnocentWitness

    Posted Jan 22, 2007 10:47 am PT

    the next thing you know, they going to say the first G stands for Gaming.

  • lzorro

    Posted Jan 22, 2007 10:43 am PT

    I don't like this one bit I think Google is getting to big for it's own good.

  • matthewjackman

    Posted Jan 22, 2007 10:39 am PT

    Can you see this going the way of websites. Ordinary product £39.99. No ad's editions £29.99. I'd break down and cry I think.

  • vaejas

    Posted Jan 22, 2007 10:31 am PT

    I can see the slogan: "It's not just billboards anymore..."
    Really any game that integrates:
    -books with text (Oblivion)
    -a notebook (Call of Cthulu)
    -a newspaper (Hitman)
    -fancy computer screens (Perfect Dark)
    -televisions (Max Payne)
    -on and on...

    Y'know, I'm sure the game designers aren't thrilled about the lack of control either.

  • TWOC2689

    Posted Jan 22, 2007 10:17 am PT

    Interesting

  • sniperpenguins

    Posted Jan 22, 2007 10:11 am PT

    aslong as its well placed not a coke sign evey 2 feet but if they putt it on vending machines and stuff like that i wouldent really care that much.

  • Igwababa

    Posted Jan 22, 2007 10:04 am PT

    google is quickly becoming the next microsoft

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