Google's Playboy Issue

Boys will be boys, but when those boys are about to sell a $36 billion technology enterprise to the public, investors generally hope adolescence can be put on hold.

Not so at Google, where founders Larry Page and Sergey Brin revealed Friday morning that an interview they gave to Playboy in April could force them to buy back any shares that are sold in the hotly anticipated deal.

The interview, in which the executives answered questions such as, "It's one thing to have volleyball games, refrigerators full of free juice and massages when you're a start-up, but can you maintain such a laid-back culture as a public company?" and "How has Google saved lives?" could be a legal headache. Executives are generally forbidden from talking publicly about their company in the run-up to an IPO, except in a prospectus.

"We do not believe that our involvement in the Playboy Magazine article constitutes a violation of Section 5 of the Securities Act of 1933," Google said in an SEC filing Friday. "However, if our involvement were held by a court to be in violation of the Securities Act of 1933, we could be required to repurchase the shares sold to purchasers in this offering at the original purchase price for a period of one year following the date of the violation."

The company said it would contest vigorously any claim that a violation of the Securities Act occurred.

Complicating matters, Google indicated in its filing that the interview contained inaccuracies about its business, including a claim that more than 65 million people use its search engine every day. The actual figure is more like 65 million a month. The interview also understated Google's employee count by more than 50% and contained dated information about the storage advantage over competitors enjoyed by its new Web-based email service.