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Google aims ads at games

October 09, 2008|From Bloomberg News

Google Inc., aiming to expand beyond Internet search advertising, has introduced technology to insert commercial spots into online video games.

Google is working with game makers including Konami Corp. and Demand Media Inc. and advertisers Sprint Nextel Corp. and Esurance Inc. to test the system, Ryan Hayward, a Google manager, said Wednesday. The video, image and text ads can appear when a player begins or completes a game or level.

The technology is one of Google's attempts to find new sources of revenue beyond the ads it places alongside search results, which made up almost all of its $16.6 billion in sales last year. U.S. ad sales for Web games will more than double to $478 million by 2012, according to researcher EMarketer Inc.

"Online games are still a bit of a Wild West," with few rules governing how advertisers should place their spots without irritating players, said Paul Verna, an analyst at EMarketer. Google's system could help organize the market and help it grow, he said.

About 200 million people worldwide play games online, Google said, citing Reston, Va.-based researcher ComScore Inc. The company bought Adscape Media Inc. last year for an undisclosed sum to get the game-ad technology.

Google acquired DoubleClick Inc. this year to get a foothold in the market for image ads, and the company continues to experiment with ways to draw more revenue from video ads through its YouTube site. YouTube said Tuesday that it would offer users links to Apple Inc.'s iTunes store and Amazon.com to buy songs and video games they find on the site.

The game ads will probably be a "drop in the bucket" compared with Google's search-ad business, Verna said. If the struggling economy holds back growth in the online-advertising market, any new revenue source will still be important for the company, he said.

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