Microsoft (NASDAQ:MSFT) may be a distant third in search engine advertising, but its Massive in-game ad network really knows how to slay the competition when it comes to reaching diehard gamers.

Massive is teaming up with Activision Blizzard's (NASDAQ:ATVI) site, where players of Blizzard's popular role-playing games come together for one-on-one virtual battles, to serve up in-game marketing.

Massive has mastered the art of getting brand advertisers into the game, refreshing Web-tethered titles with fresh ads whenever players go past things like in-game billboards, vending machines, and theater marquees. Massive is the exclusive broker for in-game ads on Xbox's 360 console, but the deal gives Microsoft a little more skin in the PC gaming market.

It's ironic, I know. The world's leading PC software company is a force in video game console sponsorships but weak inside the box. Google (NASDAQ:GOOG) is just too strong in cyberspace, and even the struggling Yahoo! (NASDAQ:YHOO) has a firm grasp when it comes to display advertising.

Then again, maybe Massive is Microsoft's key to making a difference. Xbox 360s, PS3s, and Wiis all offer Wi-Fi connectivity, making it a breeze for Massive to deliver in-game advertising for developers. Video games are one of the few resilient growth areas in retail, going by recent quarterly reports out of GameStop (NYSE:GME) and Blockbuster (NYSE:BBI). This comes at a time when year-over-year search engine traffic has surprisingly dipped. Advertisers hungry for young audiences should ramp up their in-game marketing efforts while scaling back elsewhere.

So go ahead and show Microsoft's Massive some love. It was a visionary Microsoft purchase two years ago. It's at the right place at the right time for a company that's been caught out of position before.

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Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers selection. GameStop and Activision Blizzard are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of all three consoles but finds himself spending way too much time with the family on the Wii at the moment. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, always there to make sure that Fools don't overheat.