Microsoft makes Massive splurge on in-game ads

Microsoft has announced it is buying Massive, a company that puts advertising into video games.

Robbie Bach, president of Microsoft's entertainment and devices group, speaking at the MSN Strategic Account Summit in Redmond said: "That Massive team will be joining Microsoft and the MSN group. They will become a key part in what we are doing in this space."

Bach said video game advertising is a potentially great opportunity but also must be done carefully.

He said: "Make sure whatever you do doesn't interfere with the game playing experience. Do not interrupt someone when they are gaming. It is a very immersive experience."

But he said, if you put the ads in the game, the ad message can be very effective. "They get it, and they may not even know they got it," Bach said.

The financial terms of the deal were not provided.

The announcement, which was reported last week by The Wall Street Journal, was timed to coincide with Microsoft's advertiser conference, which ends on Thursday.

Earlier in the day, the software maker gave details of plans to transform its new adCenter engine from a paid search tool into a vehicle that can one day deliver all manner of advertising into websites, video streams and mobile devices.

The adCenter product is still in its infancy, though. Last quarter, Microsoft saw its revenue per search fall as it switched more of its volume onto adCenter and away from Yahoo!'s engine. Microsoft said it is now using adCenter for 100 per cent of its US paid search ads.

Ina Fried writes for CNET News.com