Google gets DoubleClick, shareholders applaud

By David Lawsky and Eric Auchard

BRUSSELS/SAN FRANCISCO (Reuters) - Google Inc won approval on Tuesday from the European Commission of its planned acquisition of DoubleClick Inc and promptly closed the deal, sending its stock 6 percent higher.

The move will allow the Web search and advertising leader to accelerate its move into the market for corporate banner and display ads, where it has little business, and fulfill an expansion plan that has been on hold for a year.

Separately, a New York federal judge capped possible damages media conglomerate Viacom Inc can seek in its $1 billion lawsuit alleging Google was negligent allowing pirated programs on its YouTube online video sharing service.

The raft of favorable news, coming on a buoyant day for U.S. stock markets when the Dow Jones index closed up 3.6 percent, countered a string of bad news that has had Wall Street debating whether Google's rapid growth is slowing.

Google shares enjoyed a minor rally, gaining 6.3 percent to $440, as the stock began to reverse a sharp decline since the start of 2008, when it stood near $700.

Shares hit 17-month lows on Monday and remain off 36 percent so far this year after jumping 50 percent in 2007.

The Web search leader has been hampered in moves to expand into the market for corporate brand ads through its 2007 merger with DoubleClick and into the emerging video advertising market through its acquisition of YouTube in 2006.

"Google has kind of languished strategically over the past year," Sanford C. Bernstein analyst Jeffrey Lindsay said. "The strategy for 2007 was really put on ice for quite some time."