Google Creates $500M Reserve over Ad Probe by U.S.

11.05.2011
Google Inc. took a $500-million reserve in connection with a Justice Department investigation of its online advertising program, the internet giant reported in a that made adjustments to its first quarter earnings.

The filing, which noted a "potential resolution" of a DoJ investigation "into the use of Google advertising by certain advertisers," provided little additional detail. But the charge taken by the company, it said, lowers net income for the quarter to $1.8 billion from $2.3 billion.

There was also no discussion about why the charge was taken retrospectively on its first quarter accounts. It is also not clear to whom Google would have to make the payment in the event of a resolution.

Per-share earnings were adjusted to $5.51, compared with $7.04 when the first-quarter results originally were announced.

The company added that it doesn't believe the matter would have a material adverse effect on its business, consolidated financial position, operating results or cash flow, although it said it couldn't predict the outcome of the matter.

Google declined to comment on the filing, saying that it reflected a legal matter. But it included an in the Google website.