Google Agrees to Buy DoubleClick for $3.1 Billion in Cash

Google Headquarters
Google Headquarters

Web advertising leader Google will acquire DoubleClick, a leading online advertising network, for $3.1 billion, consolidating Google's grip on the Internet ad market.

The deal represents the largest acquisition in Google's history and comes just six months after Google paid $1.65 billion to acquire video-sharing site YouTube. Terms of the deal call for Google to pay cash to DoubleClick investors.

The DoubleClick acquisition promises to fortify Google, the juggernaut of search-based advertising on the Web, as it expands into print, radio, video, mobile and TV ad markets. The combination should also bolster the ad targeting and analysis capabilities that Google can offer advertising customers.

However, Google's acquisition of DoubleClick is not sitting well with Microsoft , AT&T , Time Warner's and several other large Internet and media companies the Wall Street Journal reports. These companies are hoping to encourage antitrust regulators to closely scrutinize the purchase, said executives at the companies.

DoubleClick, a dot-com stock market star and leading independent player in the first generation of online advertising during the 1990s, has been majority-owned by San Francisco private equity firm Hellman & Friedman since 2005. Hellman & Friedman paid $1.1 billion in stock and debt for its stake. JMI Management is a co-investor in the company.

Executives at the companies said the deal would give Google a grip over the booming market for online advertising. The planned acquisition, announced Friday, will be subject to a review by either the Justice Department or Federal Trade Commission, in accordance with standard procedure for acquisitions larger than a certain size.

The Wall Street Journal reports that the companies take issue with the fact that Google already controls the lion's share of the market for Internet-search advertising and related contextual ads; the DoubleClick deal would make it a dominant player in the market for serving graphical ads on Web sites on behalf of the sites' publishers.

The Wall Street Journal had also reported that Microsoft, which was involved in bidding for DoubleClick, pulled back after the auction price rose above $2 billion. Yahoo! and Time Warner's Internet division AOL were also said to have eyed a DoubleClick bid.