UPDATE 3-Google to pay $3.1 bln for DoubleClick ad business

(Adds details of private equity payout, Yahoo comment)

By Eric Auchard

SAN FRANCISCO, April 13 (Reuters) - Google Inc. (GOOG.O: Quote, Profile, Research, Stock Buzz) said on Friday it would pay $3.1 billion for Web ad supplier DoubleClick Inc., its biggest acquisition, accelerating a push into the graphic ad market led by Yahoo Inc. (YHOO.O: Quote, Profile, Research, Stock Buzz).

The juggernaut of Web search-based advertising beat out suitors Microsoft Corp. (MSFT.O: Quote, Profile, Research, Stock Buzz) and Yahoo in the final stages, sources familiar with the negotiations said. Time Warner Inc.'s (TWX.N: Quote, Profile, Research, Stock Buzz) AOL online unit had earlier considered a bid.

The agreed price represents a huge payday for San Francisco private equity firm Hellman & Friedman, DoubleClick's majority owner, which 21 months ago paid $335 million for the assets acquired by Google, a source familiar with the deals said.

The purchase propels Google deeper into the Web display ad market, which includes richer graphic and online banner ads for corporate brands, and represents half of all online marketing. Until now, this business has been dominated by rival Yahoo.

"This shores up Google as the absolute leader," said Forrester Research senior analyst Shar VanBoskirk. "This rounds out their capabilities in everything in the online space. There isn't anything they don't have."

New York-based DoubleClick would also fortify Google with ad-targeting and analysis capabilities as the company expands into print, radio, video, mobile and television ad markets.

"The DoubleClick platform touches so many of the existing Google customers," Google Chief Executive Eric Schmidt said on a conference call. "It accelerates our entry into some of these markets by several years."