Google Looking to Invade Video Games
Google has a stranglehold on the search engine realm, and consequently dominates Internet advertising, but the company is not satisfied with that. In recent times, Google has been making progress in its print, radio, and even billboard advertising efforts. Now it seems that the Mountain View, California-based giant is licking its chops at the thought of entering the video game realm.
According to last Saturday’s online edition of The Wall Street Journal, Google has been in talks with in-game advertising company Adscape Media, Inc. The private company sells software that allows for the placement of advertisements in video games.
Last year, Microsoft acquired Massive Inc. for $200 million. Massive is also an in-game advertising company.
According to Parks Associates, in-game advertising will figure to be a significant source of revenue for big players. The company foresees in-game advertising to be worth $400 million by 2009, which is a sizable increase from the $80 million value in 2005.
Yankee Group expects this figure to reach $732 million by 2010.
But there is still the hurdle of a relatively small and very new target market. Although the newest gaming consoles released by Microsoft, Nintendo, and Sony all offer Internet connectivity, the offerings are still new and largely untapped. As consoles continue to realize the potential in the online aspect of gaming, and as they work to seamlessly integrate the Web with video games, the financial viability of this realm will only grow.
Microsoft figures to have the first-mover advantage, as well as the benefit from having its own gaming console to integrate. Nevertheless, if Google can effectively and efficiently leverage its online advertising prowess into the gaming world, all bets are off.
When Google does enter this market, it will be interesting to see to what extent it personalizes and targets its ads. There is the inherent potential that users might feel spied on if ads turn out to be a little bit too targeted, but tasteful personalization will always win out over blandness.
Early reports hint at a price of anywhere between $20 million and $30 million for the San Francisco-based Adscape, a small price for Google to pay compared to Microsoft’s comparatively pricey acquisition.
Sources:
http://publications.mediapost.com/index.cfm?fuseaction=
Articles.showArticle&art_aid=54215
http://arstechnica.com/news.ars/post/20070122-8667.html
http://www.redherring.com/Article.aspx?a=20876&hed=Google
+in+Talks+With+Adscape§or=Industries&subsector=
EntertainmentAndMedia
