Google's regulatory filing this afternoon disclosed that it was taking a $500 million charge in the first quarter, apparently to potentially settle charges related to a Department of Justice investigation of the company. Google didn't elaborate much, and only said that the probe was "into the use of Google advertising by certain advertisers," The Wall Street Journal reported.
The $500 million charge wasn't announced at the time of Google's Q1 earning call in April this year. Now that it has been factored in, net income per diluted share was only $5.51, compared to the $7.04 per diluted share reported April 14, a 22% drop. Google has updated its Q1 earning press release to reflect the change.
From the SEC filing:
In May 2011, in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $500 million for the three month period ended March 31, 2011. Although we cannot predict the ultimate outcome of this matter, we believe it will not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows.
The wording of Google's disclosure was interesting, in that it said the investigation related to the use (misuse?) of Google advertising by "certain advertisers," so perhaps Google would be liable for helping, or failing to stop, this use.
Google spokespeople hadn't responded to a request for additional information by publication time.