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Microsoft is said to be planning to buy in-game advertising heavyweight Massive in a deal worth $200 million to $400 million, the Wall Street Journal is reporting.
According to the Journal (paid subscription required), Microsoft expects to acquire the 80-person New York City outfit in a bid to bring the technology behind much of the ads found in video games today in-house."
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CNetUpdate: Got a copy of WSJ, here are the highlights, verbatim:-- "Microsoft plans to announce next week an agreement to buy the New York company, said people familiar with the situation. People familiar with the matter estimated the deal to be valued at $200 to $400 million."
--"Microsoft is testing its ad-brokering system, called AdCenter, in the U.S. and several markets around the world. The software giant plans to tie its brokering service with Massive's network, said people familiar with the company's plan. Microsoft's long-term goal is to have one online service that advertisers can go to buy ads across a broad range of Microsoft products. For now the Massive network will be part of a palette of advertising offerings Microsoft salesmen will offer clients, the person said."
--"Advertisers spent about $56 million on advertisements in videogames last year, up from $34 million the prior year."
--"So far, Massive mainly delivers ads into games for personal computers, which are commonly connected to the Internet. But a bigger opportunity lies in delivering ads to systems such as Xbox 360, Sony Corp's forthcoming Playstation 3 and other consoles that account for most of the industry's sales. [...] Massive, in fact, has quietly begun delivering ads into games for the Xbox including Ubisoft's action title, "Rainbow Six Lockdown".
Robert A Guth, Nick Wingfield, "Microsoft's 'Massive' Move Into Game Ads", Wall Street Journal, April 26, 2006, p.B1UPDATE [April 27, 06]:
NY Times, "
Microsoft Is Said to Be Near Deal to Buy Ad Technology", Matt Richtel.
"Microsoft is close to reaching a deal to buy Massive Incorporated, which makes technology that inserts advertisements into video games, a member of Massive's board said yesterday.
The board member, Douglas P. Miscoll, a partner with the venture capital firm Newlight Associates, said the price was $200 million to $400 million, but he declined to be more specific.
He said the deal was not yet signed and that it could yet fall through. The deal "has not yet closed," Mr. Miscoll said, "but we think we're on track." He said his firm had invested around $4 million in Massive. [...]
The notion that Sony might reject ads placed by Massive "is a possibility, but it may not in fact be the way things turn out," Mr. Miscoll said. He added that Sony or others, even if they compete with Microsoft, may not be able to resist accepting Massive's advertising because 'the economics of the Massive network to the video game publishers are very compelling.'"
