Google agreed to buy the internet ad-placement service DoubleClick for $3.1 billion, greatly strengthening its grip on the rapidly growing business of selling advertising on the Web.

The deal will allow Google to sell display ads in addition to the classified-style text notices for which it is famous. Buying DoubleClick will also let Google sell space on websites that are not part of its partnership network, which includes many high-traffic sites such as those run by the Wall Street Journal, MySpace, and America Online.

Google, which snared DoubleClick by outbidding Microsoft, agreed to pay almost triple the amount that a pair of private equity firms, Hellman & Friedman and JMI Equity, spent to take the company private just two years ago.

Microsoft has been trying to catch Google in the online advertising business, and the loss of DoubleClick would be a major setback, the New York Times reported. The Times quoted an analyst with RBC Capital Markets, Jordan Rohan, as saying that "keeping Microsoft away from DoubleClick is worth billions to Google."

While the deal increases Google’s dominance of online advertising at the same time as the company is starting to sell ads for radio stations and print publications, Google may yet have considerable hurdles to clear.

The Wall Street Journal said the acquisition will also complicate Google's already fraught relationships with Web publishers. While they rely on Google for much, if not all, of their advertising revenue and traffic, many worry that Google may become powerful enough to dominate the commercial side of the Web.

Buying DoubleClick also gives Google a more efficient, market-based approach to selling ads. Google was a pioneer in using auctions to sell ad opportunities based on variables like page placement and accompanying screen content. This allowed advertisers to zero in on the people who would be most receptive to their sales pitches.

But DoubleClick is developing a Nasdaq-like exchange for online ads, allowing Google to act as a broker for Web publishers without advertisers’ being required to have a formal revenue-sharing arrangement with Google. This would provide a forum where publishers and advertisers can meet and make their own deals, while Google would collect a fee.

The efficiency of online auctions has led some advertising executives to consider using auctions to place ads on television, in magazines, and throughout other so-called offline media. DoubleClick’s new exchange could function as a hub for both online and offline ad sales, the Times said.

The deal is expected to close by the end of the year, CNet News reported.