Massive’s technology for weaving dynamic, relevant ads into video games will extend next-generation advertising across Microsoft properties and beyond.

REDMOND, Wash. — May 4, 2006 — Today at the seventh annual MSN® Strategic Account Summit, Microsoft Corp. announced it is acquiring Massive Inc., the New York-based creator of a world-leading network for video game advertising, in a move that will help deliver dynamic, relevant ads across Microsoft’s online services, starting with Xbox Live® and MSN Games. Massive’s solution depicts brands in various forms within the game — on soft-drink cans and pizza boxes, on billboards and posters, and in images on TV screens — where gamers would expect to see them in real life, adding realism to the overall gaming experience. Massive employees will continue to work from their current locations, including their headquarters in New York and offices in London, Los Angeles, Chicago, San Francisco, Paris, Sydney, Cologne and Toronto. Financial details of the acquisition were not disclosed.

The Opportunity for Advertisers
The acquisition of Massive broadens Microsoft’s commitment to providing advertisers with a highly effective means of reaching specific demographic groups of consumers in the rapidly growing and interactive medium of online gaming.

“Advertisers are having a tough time connecting with the elusive 18- to 34-year-old male demographic because this group continues to spend less time watching TV and more time playing video games,” said Joanne Bradford, corporate vice president of Global Sales and Marketing and chief media revenue officer at Microsoft. “Massive and Microsoft can help lead with our shared vision of delivering more targeted, measurable and effective opportunities for advertisers to reach today’s youth audience in a largely untapped market.”

The Commitment to Gamers
Massive and Microsoft will continue to prioritize gamer satisfaction, applying very rigorous standards to ads before they can be included in a game. These standards allow for only those ads that add realism and entertainment value to the overall game experience, not those that might detract from gameplay. Xbox has worked with Massive for more than a year and found that Massive’s technology, innovations and global gaming ecosystem are designed to ensure that in-game advertising is implemented effectively. According to research by Nielsen Interactive Entertainment, the majority of gamers find that relevant advertising enhances the realism of games.

The ad-funded model supported by Massive helps game developers deliver high quality and push the creative boundaries of video games to deliver the best gaming experience. It helps publishers offset the skyrocketing costs of video game development, which can in turn benefit gamers, keeping game prices affordable and opening the door to free gameplay, free content, tournaments and other possibilities.

Within the casual gaming space, Microsoft plans to implement Massive’s solution to extend in-game advertising capabilities to games on MSN and within MSN Messenger, delivering advertising solutions for the casual gaming audience of females 35 years old and up.

Taking Dynamic Ads Beyond Games
Microsoft also has begun exploring how to apply Massive technology to incorporate dynamic advertising into other online environments, such as Windows Live™ and MSN, and to make it available on the adCenter advertising platform. “We are committed to building an advertiser network that serves a wide spectrum of needs,” said Kevin Johnson, co-president of the Platforms & Services Division at Microsoft. “Our acquisition of Massive will expand opportunities for advertisers and enable connection to a broader audience of digital consumers.”

“Joining forces with Microsoft will allow Massive to deliver even greater benefits for advertisers, game developers and gamers through one of the world’s largest, most comprehensive online networks,” said Mitchell Davis, CEO of Massive Inc. “While our current business relationships will remain in place, with Microsoft we have the prospect of extending our technology into a vast array of new markets and online environments.”

About MSN and Windows Live
MSN attracts more than 465 million unique users worldwide per month. With localized versions available globally in 42 markets and 21 languages, MSN is a world leader in delivering compelling programmed content experiences to consumers and online advertising opportunities to businesses worldwide. Windows Live, a new set of personal Internet services and software, is designed to bring together in one place all the relationships, information and interests people care about most, with enhanced safety and security features across their PC, devices and the Web. MSN and Windows Live will be offered alongside each other as complementary services. Some Windows Live services entered an early beta phase on Nov. 1, 2005; these and future beta updates can be found at http://ideas.live.com. Windows Live is available at http://www.live.com. MSN is located on the Web at http://www.msn.com. MSN worldwide sites are located at http://www.msn.com/worldwide.ashx.

About Microsoft
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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