Google said on Thursday it is testing ways to deliver ads in computer games but declined to comment on the Internet buzz that it would be on the market by year's end.
"We think this rich environment is a perfect medium to deliver relevant, targeted advertising that ultimately benefits the user, the video game publisher and the advertiser," the Internet colossus said in a written statement. "We are currently in tests to determine the best approach to in-game advertising."
Google, the undisputed king of Internet search advertising, has been using portions of its wealth to expand its realm into newspaper, radio, "smart" phones and video games.
Google bought in-game advertising firm AdScape for US$23 million in February.
Advertising in video games is considered a powerful marketing tool because messages can be tailored to precise demographic groups and players focus intensely on game scenes, remembering what they see there.
A player of a shooter game could be scouring a virtual cafeteria for enemies and find one hiding behind a vending machine emblazoned with soda or candy brands.
Billboards along streets in racing games could bear real advertising geared to car lovers.
As video games are played on consoles or computers linked to the Internet, ads can be routinely updated. It is essential, according to game makers, that ads cause no disruption to play.
"We are working with publishers to help advertisers reach their target audiences while maintaining a high quality, engaging user experience," Google said.
While Google declined to reveal specific in-game ad plans, website GigaOm contends the California firm will launch a version of its ad platform with a computer game next month.
PlayStation video game consoles maker Sony last month created a unit devoted to developing "dynamic" in-game ads.
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