Microsoft is hoping to boost its online advertising ambitions with the purchase of video game ad seller, Massive.

The software titan says is plans to use the skills of its New York-headquartered acquisition to deliver ads into Microsoft online video game services, including Xbox Live and MSN Games.

Massive operates a system that allows game publishers to leave spaces within their games, such as on billboards or pizza boxes, where advertisers' brands names can be inserted.

The terms of the deal have not been disclosed but it is believed to be worth up to $400 million (€314.8m; £216m).

Massive's technology will also be added to adCenter, Microsoft's much vaunted challenge to Google's domination of the online ad searches.

The company officially launched adCenter yesterday. The 'me-too' system lets advertisers bid to have their ads displayed alongside search results. It is modelled on Google's highly successful AdSense and a similar system used by Yahoo.

Microsoft ceo Steve Ballmer, speaking to around 700 advertisers, pledged to increase investment in the MSN and online businesses to $1.6 billion next year as the battle with Google intensifies.

Data sourced from Wall Street Journal Online; additional content by WARC staff