BigShinyThing

Not so, says Mr Gates. According to the Wall Street Journal Microsoft is planning to buy in-game advertising start up Massive. According to sources quoted in the article, the deal is thought to be valued between at $200 million to $400 million:

Microsoft’s planned purchase highlights a belief among game-industry executives that videogames could become a large new medium for advertising. Major media companies have similarly begun to increase their investments in game-related media to ensure they stay abreast of consumers’ tastes. This week, Viacom Inc. paid $102 million to acquire Xfire Inc., a start-up that operates an instant-messaging service that connects gamers over the Internet. Last September, News Corp. agreed to pay $650 million to acquire IGN Entertainment Inc., a company that operates a collection of Web sites for game enthusiasts.”

And, of course, Microsoft have a vested interest in the success of the in-game advertising medium.

Microsoft is pitching in-game advertising on Xbox Live online-videogame service as a new source of revenue for videogame publishers such as Electronic Arts Inc. of Redwood City, Calif., and Ubisoft. The Massive acquisition is also part of a broader attempt by the Redmond, Wash., software giant to grab a bigger piece of the online advertising boom that’s fueling the growth of Google Inc. and others. Microsoft has struggled to take control of a larger piece of that market as Google extends its lead in the business of linking online ads to Internet search results.

Advertisers spent about $56 million on advertisements in videogames last year, up from $34 million the prior year. But a recent report by the Boston research firm Yankee Group predicts that the in-game advertising market will reach more than $700 million by 2010. Yankee Group also predicts the number of games with advertising in them will double by the end of this year to more than 200.

MIT has more highlights from the article.