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Seed State of Mind
By allowing for an iterative, and small scale development budget we begin to see more innovation in gaming coming outside of the traditional game studio distribution model and the advertiser supported free Flash game model.
WebKinz, Club Penguin, Dofus and many others under development have each in their own way innovated on the game studio & advertiser models.
More recently we have seen ConduitLabs, Area.net and other social MMOG companies receive funding that place them in the Internet Social Website budget - yet they are developing rich social playgrounds that merge game environments and social media.
Certainly it is an interesting time for the game industry (much like the film industry) as the old distribution models and cost structures are being replaced by more creative concepts delivered outside of areas that they have been traditionally strong in.
Here is a great article on Boutique MMOG's with some numbers and examples.
Just to clarify, Groove Media's approach is integrated advertising (think: Mercedes logo on the golf flag, not: pre-roll IAB).