Google's Mad Dash

Just in time for its quarterly week in the spotlight, here comes Google's(GOOG) highly anticipated second act: display advertising.

Late Friday, the search giant -- which will report first-quarter earnings on Thursday -- announced that it had acquired online advertising tech firm DoubleClick for $3.1 billion. Consistent with prior statements that it considers its own stock undervalued, Google paid the deal in cash to the consortium of private equity firms that held DoubleClick.

The acquisition will provide a serious boost to Google's efforts in the market for rich, graphic advertising. Until now, the overwhelming majority of Google's revenue has come from the small, four-line text ads served up next to its search results.

"The first, and in many ways the most compelling, argument for this from a Google perspective is that it is accelerating our display advertising business," CEO Eric Schmidt said in a conference call for investors late Friday. The deal would allow Google's efforts to leap forward by several years, as compared with going it alone in display advertising, he added.

But the acquisition marked more than just a major leg up in another big market, Google's management repeated during the call. By combining DoubleClick's strength in the display market with its own lead in search advertising, Google would be able to innovate the entire field of online advertising.