The acquisition may help Google create a new operating system for the entire advertising industry. DoubleClick will also help Google expand its web display advertising business with richer graphic.

Currently, all display advertising is dominated by rival Yahoo Inc.

While both Yahoo and Microsoft had bid for DoubleClick, Time Warner Inc.''s AOL online unit had considered a bid earlier in the process.

Google''s rivals, have, meanwhile, asked regulators to closely scrutinise the planned acquisition, citing antitrust concerns.

Investors in Wall Street, however, were more excited about the acquisition and bought into stocks of smaller digital advertising firms, driving up prices, discounting the possibility of Google-DoubleClick stealing business away from smaller rivals.

Microsoft Corporation is leading protest over the merger deal that could potentially give Google control of 85 per cent of the online ad market.

Brad Smith, senior vice president and general counsel of Microsoft, called for regulatory authorities to closely scrutinise the merger, saying the merger deal "raises serious competition and privacy concerns."

"Google''s acquisition of DoubleClick gives them unprecedented control in the delivery of online advertising and access to a huge amount of consumer information by tracking what customers do online," Smith said, adding, "We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market."

Microsoft has urged regulators to consider negating approval for Google''s planned merger with DoubleClick, saying it would damage competition in the rapidly expanding market for web advertising.

Google and DoubleClick, according to Smith, could "observe and capture consumer information on an unprecedented scale."

Microsoft was one of the companies, along with Yahoo and Time Warner that lost out to Google in the bidding for DoubleClick.

Google, however, dismissed Microsoft''s concerns. "We''ve studied this closely, and their claims, as stated, are not true," Eric E. Schmidt, chief executive of Google, said in an interview last night.

"We think antitrust authorities should take a hard look at this deal and the implications," said Jim Cicconi, senior executive vice president for external affairs at AT&T. "If any one company gets a hammerlock on the online advertising space, as Google seems to be trying to do, that is worrisome."

Cicconi said that AT&T would be affected by a Google-DoubleClick combination because AT&T distributes services over the Internet like digital television, known as IPTV.

A Time Warner spokesman said that the company had not decided whether it would try to block the deal. A Yahoo spokeswoman declined to comment.