Playboy interview puts UKpound 20 Billion Google float in jeopardy.

By James Quinn, Daily Mail, London Knight Ridder/Tribune Business News

Aug. 14--Google's founders Sergey Brin and Larry Page could end up buying back shares currently being auctioned after an ill-timed interview in Playboy.

The latest twist in the internet search engine's UKpound 20 billion float sees the pair facing investigation for comments from an inter-view published just hours before the auction began yesterday.

In the September edition of the magazine, Brin and Page gave updates on the capacity of Google's Gmail service, current staff numbers and the number of users.

Although the interview was given on April 22, before Google filed its float registration documents, the US Securities and Exchange Commission has strict rules on comments made during the "quiet period" leading up to a float.

To make matters worse, Google needs the SEC to approve its registration documents before the company can complete the share sale.

Google said that it did not believe the comments constituted a violation of the rules, but if it had breached rules it might have to buy back the 25.7 million float shares for up to a year at the original float price.

The news hit confidence on the first day of the firm's "Dutch auction" that will make paper billionaires of the founders as well as chief executive Eric Schmidt and Welsh financier Michael Moritz.

A guide price of UKpound 60-UKpound 74 a share has been issued but investors can bid at any level outside of this in the auction, which could remain open for up to a week.

The Playboy affair is the latest in a long line of regulatory breaches including the unauthorised issue of UKpound 20m of shares to staff and suppliers, and a legal battle with Yahoo! that was resolved earlier this week.

No date has been set for its listing on the Nasdaq market, but the price is expected to be revealed next week.

UKpound preceding a numeral refers to the United Kingdom's pound sterling. To see more of the Daily Mail and the Financial Mail on Sunday, or to subscribe to the newspaper, go to http://www.thisismoney.com.

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