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Google Buys Adscape for $23 Million February 19, 2007

Posted by grhomeboy in Google.
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The rumors were true. It’s been confirmed today that Google has reached an agreement to acquire in-game ads firm Adscape Media. While Google is loaded with cash, some remain skeptical about Google making a big splash in in-game advertising.

Following a Wall Street Journal report that surfaced late last month, industry sources have confirmed that Google has indeed entered the in-game advertising space. According to business publication Red Herring, Google has reached an agreement to purchase Adscape Media for a cool $23 million.

Adscape, a company that officially launched in February of last year, hasn’t firmly established its position in the in-game advertising market and the company has not gotten the kind of attention that Massive, IGA or Double Fusion have received, but what Adscape does give Google is some interesting technology patents. And with Google’s vast resources, the company could no doubt leverage the in-game ad tech to eventually gain a solid foothold in the space.

Some remain skeptical of Google’s capabilities in this area, however. “There is a whole world of difference between the form of advertising done by Google and Madison Avenue,” one source familiar with the in-game ad business told Red Herring, comparing Google’s familiar text-based ads to the rich media used in videogames. “While everyone appreciates the dollars Google can throw around, when it comes to [in-game ad] experience they just don’t have it.”

The report points out that the deal is signed but not yet fully closed. Adscape’s executive team will probably remain together until the start of March, and then certain key staff will move to Mountain View. Adscape execs likely to make the move include CTO Dan Willis, Chairman Bernie Stolar, and VP of Marketing Eva Woo. The exact details on the management shuffle are not confirmed, however.

Assuming the deal is closed, in-game ad leaders would seem to welcome it, not fear it. Speaking to GameDaily BIZ recently, Ed Bartlett, IGA’s VP of Publishing for Europe, commented, “… it’s another validation of the sector. With Microsoft buying Massive, it’s another one of those proof points. From a business standpoint, however, we’re not particularly concerned. Even if it’s true, we see it as positive for the sector and it shouldn’t affect us much.

“For what they might do, there’s been talk of Google selling ads to magazines and things like that. For us, to be able to talk to video game companies, to speak their language, is huge. From what I understand [Adscape’s] pure technology at this point, not a built up network. We’ve already got a two-year head start, so for someone to come into the space and take over will be difficult.”

He added, “Even if they do come into the retail space, the market is going to be large enough to handle 3 or 4 major players. We like competition; we think this validates the space. For us, I think we have an advantage in that we cover all types of media. A lot of stories are guessing that Google will go after the casual space, similar to the fields they’re covering already. So that’s going to be interesting to watch since we’re going into the casual media ourselves.”

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