Nov. 13 (Bloomberg) -- European Union regulators started an in-depth investigation into Google Inc.'s plan to buy DoubleClick Inc., saying the purchase may hurt competition for online advertising dollars.

The European Commission, the EU's antitrust authority in Brussels, said in a statement today that it will review the $3.1 billion acquisition for 90 working days and make a ruling by April 2. Google announced the proposed purchase in April to bolster sales of Internet ads that include pictures and videos.

An in-depth EU probe sets the stage for a wider fight over the deal, which is already under scrutiny in the U.S. after competitors including Yahoo! Inc., Microsoft Corp. and AT&T Inc. expressed concerns that the combination would hurt competition in the $40.6 billion global online advertising market. Other groups have complained that the combination may harm consumers' privacy.

The commission's decision ``provides the thorough examination of the proposed merger that Yahoo believes is needed,'' Toby Coppel, Yahoo Europe's managing director, said in a statement. ``Competitive online advertising markets in Europe are of great importance to publishers and advertisers.''

Google, based in Mountain View, California, generates revenue from selling text-based ads that appear next to search results. DoubleClick's two main products help Web publishers and companies manage online advertising. The software handles so- called display ads, which include graphics or animation.

Avoid Delays

The company, owner of the world's most popular search engine, said in a statement that it's ``disappointed'' with the commission's decision and will seek to avoid further delays.

Google will continue to work with the regulator ``to demonstrate how our proposed acquisition will benefit publishers, advertisers and consumers,'' Google Chairman Eric Schmidt said in the statement.

Shares of Google rose $28.48, or 4.5 percent, to $660.44 at 4 p.m. New York time on the Nasdaq Stock Market. They've climbed 43 percent this year.

``It looks like they want more time to review the case and possibly seek some kind of concessions probably dealing with privacy,'' said Jeffrey Lindsay, an analyst at Sanford C. Bernstein & Co. in New York, who rates the shares ``outperform.'' ``If there were serious antitrust objections at this point, they would have been voiced.''

EU Commissioner Neelie Kroes said Oct. 11 the review of the transaction will focus on competition, not privacy issues.

Harm Consumers

The commission said today that Google is the ``leading provider'' of online advertising space and ``intermediation services,'' which is the management of supply and demand for Web sites' ads. DoubleClick is the principle provider of technology that delivers ads to Web sites, it said.

The commission said it will study whether the combination of the two companies ``could lead to anti-competitive restrictions for competitors operating in these markets and thus harm consumers.''

The European Publishers Council, which represents newspapers and magazines, urged regulators to look at how Google's bid for DoubleClick may reduce advertising choices for media companies.

Democratic U.S. Senator Herb Kohl of Wisconsin, who heads the subcommittee that oversees antitrust issues, said in September that the purchase may give Google a ``stranglehold'' in online ads. U.S. lawmakers have questioned whether the purchase will lead to higher ad prices and harm consumers' privacy.

Google Lead

Google has extended its lead over Yahoo and Microsoft in the Internet search market, capturing more than 60 percent of global queries and cashing in on the text ads that run alongside search results. The acquisition may further its expansion into new markets and build its business in graphical display ads.

Since Google announced its plan to buy New York-based DoubleClick, rivals have invested about $11 billion in acquisitions in the Internet ad business.

Microsoft bought DoubleClick competitor AQuantive Inc. in August for about $6 billion. Redmond, Washington-based Microsoft won approval for the purchase from the U.S. Federal Trade Commission in July. Microsoft also announced plans in July to buy advertising auction exchange AdECN Inc.

BlueLithium, Real Media

Yahoo agreed in September to buy the U.S.'s fifth-largest online advertiser, BlueLithium Inc., having bought Right Media Inc., a New York-based auction site for online advertising, in July.

U.K. advertising group WPP Group Plc, the world's second- biggest advertising company, bought 24/7 Real Media, a New York- based online ad agency, for $649 million in July and French holding company Publicis Groupe SA bought Boston-based online ad agency Digitas for $1.3 billion.

AOL, Time Warner Inc.'s Internet unit, agreed to buy online advertising company Quigo Technologies Inc. on Nov. 7 to give customers more control over where their ads appear.

Google said in the statement that it will seek to avoid further delay in the regulatory review ``that might put us at a disadvantage in competing fully against Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive online advertising market have already been approved.''

To contact the reporter on this story: Matthew Newman in Brussels at Mnewman6@bloomberg.net.

Last Updated: November 13, 2007 16:26 EST