Adscape's technology allows advertisers to place ads within games, as well as giving marketers the ability to measure ad performance.
The deal has been on the cards for a while, and the acquisition gives Google a chance to move into a new market. The video game ad sector is estimated to be worth around $100m (£51m) now, and is forecast to grow fivefold by 2010.
Adscape officially launched in February 2006 with $3.2m (£1.6m) funding from Atlanta’s HIG Ventures.
This is a pretty exciting direction for Google to take - I can't wait to start putting together some ads to put into games. I wonder ... what percentage of the ad profits will be available for game designers? It will also be interesting to see which genres of games give the best return. Should be fun.