The report said the Mountain View, Calif., company is in talks to acquire Adscape Media Inc., a closely held San Francisco company whose technology allows for the delivery of advertising over the Internet and placement within videogames.

    It quoted people familiar with the matter as saying that a deal could be reached as early as next week.

    An acquisition of Adscape, if completed, would allow Google to offer the hundreds of thousands of advertisers who currently buy online ads through its system to also buy ads that appear within videogames, said the report.

    The market for delivering ads into games - such as a virtual billboard on a racetrack or a poster in a boxing arena - is still in its infancy, but major games publishers such as Electronic ArtsInc. believe it could be a lucrative business and many are pursuing it aggressively, according to the report.