Microsoft is adding 3D maps to Virtual Earth, reports Marshall Kirkpatrick on Techcrunch. You can see an implementation on Live Search right now.

It is very impressive. This is a huge step forward for Live Search, giving it capabilities previously only found in desktop applications like Google Earth.

Check out this view of the Las Vegas strip (Click on each image for a closer look).

It does require downloading and installing a separate package in order to see the 3D imagery – but once you’ve installed it, the effect is stunning and you quickly forget you’re using an web-based application.

It was particularly thrilling to be able to overlay realtime traffic data onto the map and imagine the possibility of navigating other data sets in three dimensions (Zestimates, home for sale, etc.).

Virtual Earth 3D is currently only available in 15 cities and you’ll need a high end computer and the latest versions of Internet Explorer to view it (sorry, no Firefox).

What’s even more interesting is Seattle real estate broker John L. Scott and discount broker ZipRealty are part of a beta group of advertisers who have launched virtual billboards inside Virtual Earth 3D maps. The 3D billboards are clickable hyperlinks.

This is really moving online advertising into a whole new arena. I’ve written before about advertising in virtual worlds, but I’d always though Google Earth would be the first mover here. Kudos to the Microsoft Virtual Earth teams for delivering a knockout product.

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