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Advertising - Monday, December 18, 2006

In-game Advertising Gets More Respect with $26M Into DoubleFusion

SF-based Double Fusion, an in-game advertising network and technology provider, has raised $26M in 3rd-round funding. Norwest Venture Partners led the deal, and was joined by return backers Accel Partners and Jerusalem Venture Partners. Strategic investors included Time Warner, Hearst, IDG Ventures Pacific and Sedona Capital.

Double Fusion provides both static and dynamic in-game ads, and recently signed a deal with Take-Two Interactive Software's 2K Sports studios covering up to nine titles slated for release in 2007 and 2008. It has another has 20 partnerships with video game publishers, including console game makers THQ and Midway Games as well as Left Behind Games. Double Fusion competes with Massive (now Microsoft) and IGA Worldwide.

Yankee Group says in-game advertising revenues were just $55M last year but it expects them to grow to become a $1B market over the next few years. As our a:c euro correspondent comments, this sounds like a bubblicious prediction. This industry has yet to prove that advertisers will gone their money's worth.

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