Microsoft is in acquisition talks with Boston-based startup Third Screen Media (TSM), a provider of mobile advertising and marketing software and services, writes Red Herring, citing a Wall Street Journal report published Thursday. TSM works with advertisers, publishers and mobile service providers to facilitate mobile advertising. It has signed content providers such as MSN, USA Today and TV Guide.

TSM is reportedly looking at bringing advertising to mobile games and streaming video on mobiles. Earlier this month, Microsoft acquired in-game advertising firm Massive. Microsoft reportedly plans to use Massive's technology, and likely TSM's, to deliver ads across its online services and may integrate them with its just-launched adCenter.

TSM's MADX management platform offers the various capabilities involved in the buying and selling of ads; because of bandwidth and graphics limitations, currently ads are banners, which offer mobile phone users discounts and sweepstakes entries.