Google may buy video game ad firm

NEW YORK (CNNMoney.com) -- Google Inc. is in talks to acquire Adscape Media Inc. in a move to expand beyond its traditional Internet search advertising business and into video games, a news report said Saturday.

The Wall Street Journal, citing people familiar with the matter, reported on its Web site that Google (Charts), the No. 1 Internet search company, is negotiating to buy Adscape, a closely held San Francisco firm whose technology allows for the placement of ads over the Web in video games.

A deal could be reached as early as next week, the report said.

Terms being discussed weren't known, the news report said, but it noted that Microsoft Corp. (Charts) last year acquired Massive Inc., a company that delivers in-game ads, for nearly $200 million.

The report said that one person in the know said that for several months Google has been discussing with game publishers the prospect of delivering ads over the Internet into the action of their games.

A deal with Adscape could help Google in its bid to broker advertising across many types of media worldwide, the report said.

The Internet company, whose 2006 revenue is expected to top $10 billion on the strength of its online-ad sales, currently is testing systems for selling ads in newspapers and on radio, and has said it plans to extend into television ads.

The Journal report said Google is also discussing a possible agreement with CBS Corp. (Charts) that would include brokering TV and radio advertisements. Both CBS and Google have declined to comment on any talks.

The report noted that a Google spokesman declined to comment on any talks with Adscape, saying, "We are 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."

Adscape Chairman Bernard Stolar said he "has spoken to every major player" about a possible acquisition of Adscape, but there currently is no such deal, the report added.

In addition to Microsoft, Google competes with Yahoo Inc. (Charts) and Time Warner Inc.'s (Charts) AOL in the online search and advertising business.

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