THREE TIMES in a row now Microsoft has been trumped by Google as they tussle to acquire juicy online operators. First it was for a stake in AOL, then for YouTube and most recently for internet advertising company DoubleClick.

After the market closed a week past Friday, Google announced it had agreed to pay $3.1 billion (£1.55bn) for DoubleClick - its biggest acquisition to date.

As well as outbidding Microsoft, which apparently lost interest after the price climbed above $2bn, Google also saw off Yahoo! and TimeWarner's AOL.

That the company was willing to pay this lofty price, which an internal memo circulating at Microsoft reportedly described as "ridiculous", demonstrates just how determined Google is to dominate web advertising.

Jordan Rohan, an analyst at RBC Capital Markets, said: "Google could not let this go to Microsoft and therefore paid what it needed to pay."

By contrast, one of the biggest publically traded online ad firms, aQuantive, has a market capitalisation of $2.2bn.

But as well as keeping Microsoft out of the picture, what exactly does Google get for this kind of cash?

Until now, Google has made big bucks from showing text ads next to online searches. But the acquisition of DoubleClick allows it to enter the so-called display advertising market, dominated by Yahoo! These ads typically incorporate videos and include the banner ads so loved by corporate brands.

DoubleClick describes itself as an online marketplace where advertising agencies, marketers and web publishers can connect. The firm has more than 1500 corporate clients including MTV and Friendster.

Google will no doubt be keen to nurture these relationships. "The DoubleClick platform already touches so many of the existing Google customers," said Google's chairman and chief executive, Eric Schmidt. "It accelerates our entry into some of these markets by several years."

However, analysts have warned that clients may be scared off if they suspect Google is using DoubleClick's connections to grow its own ad network.

DoubleClick has also developed ad analysis software that again may help Google as it expands into TV, print and radio advertising.

According to TNS Media Intelligence, $9.8bn was spent on online advertising last year, 17% more than in 2005. Merrill Lynch reckons internet search ads represented 43% of that market, while display ads accounted for 34%.

Some analysts forecast the appetite for display ads will grow much faster than for search ads because of its increased targeting ability.

"We realised the scale of the display ads business was much larger than we though," Schmidt said in the wake of the deal. "That was a change of view."

Founded in 1996, DoubleClick was one of the early stars of the dotcom boom. When the company went public in 1998, its shares debuted at $4.25 apiece. By 2000, they had soared to $134. After the dotcom bubble burst and DoubleClick's shares collapsed, the firm was taken private.

San Francisco-based buyout firm Hellman & Friedman bought DoubleClick for $1.1bn in 2005. Since then, it has sold off the Abacus unit, which provides data to online marketers that helps predict shoppers' behaviour.

Hellman & Friedman was reportedly looking to sell DoubleClick, which shares offices with Google in New York, for about $2bn.

Google expects the deal to be finalised before the end of the year.

Within hours of the deal being announced, Microsoft was pressing for a review of the proposed purchase arguing that there were competition and privacy concerns. Microsoft general counsel Brad Smith said: "By putting together a single company that will control virtually the entire market Google will control the economic fuel of the Internet." Smith added that Google would gain "an unprecedented degree" of personal information about internet users' activities.

WHILE these concerns are shared by AT&T, AOL and Yahoo!, the irony of Microsoft's protestations has not been lost on the rest of the business world. Microsoft's own antitrust battles are legendary.

Google's Schmidt has said that he expects the deal to be approved by the regulators.

"This is a very, very competitive market in terms of the number of choices," he said.

There is now speculation that Google's move will spark more merger and acquisition activity throughout the rest of the online ad market.

Shares in aQuantive, which has its own ad-measurement programme, jumped 6.1% in extended trading after the DoubleClick deal was announced.

Google followed up its assault on Microsoft by announcing on Tuesday plans to launch a web-based presentation product similar to PowerPoint.

The firm already has two other applications, Google Documents and Spreadsheets, within its expanding range of web-based software that shares many features of Microsoft's Office suite of products.

Google figures released on Friday showed the firm increased profits 69% in the first quarter to $1bn (£500m).