Google set to purchase DoubleClick

SAN FRANCISCO - Seeking to expand its already well-honed ability to sell targeted Internet advertisements, online search leader Google Inc. said it agreed to pay $3.1 billion in cash to acquire ad-management technology company DoubleClick Inc.

The two companies announced the deal after the markets closed yesterday. The boards of both companies have approved the takeover, which is expected to close by the end of the year.

DoubleClick, which is based in New York, helps customers place and track online advertising, including search ads, which Google - more than its nearest search competitors Yahoo Inc. and Microsoft Corp. - has turned into an extremely lucrative business.

DoubleClick had been the target of a fierce bidding war between Microsoft and Google, and Google's winning bid is nearly three times the amount DoubleClick fetched when it went private in 2005 for $1.1 billion.

The acquisition is the largest in Google's history, beating out the $1.76 billion deal for online video-sharing site YouTube Inc. late last year.

Although Google commands the lion's share of the online advertising search market, the addition of DoubleClick's technology and client network will help further its efforts to branch out beyond simple text ads and into more multimedia offerings.

Google and DoubleClick said their combination would offer media buyers and sellers more powerful tools for targeting and analyzing online advertisements and "serving," or placing them, on an even larger network of Web sites.

"It has been our vision to make Internet advertising better: less intrusive, more effective and more useful," Sergey Brin, Google's cofounder and president for technology, said in a statement. "Together with DoubleClick, Google will make the Internet more efficient for end users, advertisers and publishers."

Shares of Google, which is based in Mountain View, Calif., fell $2.52 to $463.77 at one point in after-hours trading yesterday. DoubleClick has been privately held since 2005.

The sellers are Hellman & Friedman, a private equity firm based in San Francisco, JMI Equity, and DoubleClick management.