The European Commission has unconditionally approved Google’s $3.1 billion acquisition of DoubleClick. This marks the biggest purchase in Google’s history. Microsoft was interested in the online advertising provider as well, but the Redmond company backed out of negotiations when offers climbed above $2 billion.

The EU’s approval came despite objections from rivals (including Microsoft), because the companies did not operate in the same online advertising markets: Google’s focus is on contextual advertising while DoubleClick sells banner ads and provides so-called “ad serving”. However, Google has already been by far the most powerful company in online advertising, so I’m sure this acquisition will put them further ahead of runner-ups Microsoft and Yahoo. Especially with DoubleClick’s ad serving technology that allows its clients to easily target specific websites and customers. MSFT and YHOO do their best to narrow the distance from Google, without success as it looks so far. For example, Microsoft purchased aQuantive for $6 billion last year and Yahoo bought BlueLithium for $300 million. Yet neither of these acquisitions got them a significantly bigger share of the online advertising market.

In the official announcement of the deal on Google’s blog, Eric Schmidt, Chairman and CEO of Google, elaborates on the advantages Google will have from this acquisition:

Advertisers and publishers who work with us have long asked that we complement our search and content-based text advertising with display advertising capabilities. DoubleClick gives Google the leading platform for display advertising, enabling us to rapidly bring advances to the market in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies.

As the combination of Google and DoubleClick delivers better, more relevant display ads, we’re also looking forward to delivering an improved online experience to users. Because user trust is paramount to the success of our business, users will continue to benefit from our commitment to protecting user privacy following this acquisition. And our scale and infrastructure mean that users will also be spending less time waiting for web pages to load. Ultimately, we believe that by combining our advertising network with DoubleClick’s display ad serving products, and by investing resources in the display ad business, we will be able to help publishers and advertisers generate more revenue. That in turn will fuel the creation of even more rich and diverse content for Internet users everywhere.

Now it will be interesting to see if Yahoo will end up accepting Microsoft’s $45 billion offer or if Microsoft will raise its bid, because the two companies would surely have better chances to compete with Google in web search and online advertising if they combined forces.