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Report: Google readying in-game ad initiative

The search giant may finally be ready to unveil the fruits of its purchase of Adscape and compete for what is expected to be a billion-dollar market by 2011.

Over at Venture Beat this morning, Dean Takahashi has a piece about what appears to be a fairly well developed in-game advertising program that has been under stealth development at Google.

"Sources close to the matter said the company has developed an in-game advertising technology that allows it to insert video ads into games," Takahashi wrote. "In demos of the technology, a game character can introduce a video ad, saying something like, 'And now, a word from our sponsor,' before showing a short video at the end of a sequence in a game."

He also wrote that Google is pretty far along in the development of this initiative and could launch it soon, if it wanted to.

Of course, when and if Google does launch the program, it will hardly stand alone in the in-game ad market. Rather, that market already has one 800-pound gorilla, Massive, which is owned by Microsoft. In addition, IGA Worldwide, Double Fusion, and others, like Atari co-founder Nolan Bushnell's NeoEdge, are working on inserting advertisements into just about every kind of game.

On the other hand, none of those outfits, even Massive, have Google's ability to dramatically alter the playing field when it comes to new venues for ads.

Some, including Takahashi, question why Google hasn't gotten into the game earlier, particularly because "the seeds of AdSense for Games were planted in early 2007."

Either way, the field seems to have room for Google and the other players. One reason--which I have lamented before and will continue to each time this topic comes up--is that studies have shown that video game players actually like in-game ads because it makes their experience more realistic. As in, because there are ads everywhere we go in real life, finding them in games means our playing experiences have more veritas.

To which I sigh.

Google and the established in-game ad providers, however, see green at the end of that reality check. The Yankee Group has predicted that the in-game ad market could be worth nearly $1 billion by 2011. And while that is the kind of money that Google finds under the cushions of its couches, it's still nothing to sneeze at.