Google Founders’ Playboy Interview Is Probed by SEC

MOUNTAIN VIEW, Calif. — As the auction for Google Inc.’s shares in its initial public offering begins today, a Securities and Exchange Commission probe has already started over an interview the co-founders conducted with Playboy magazine.

The Playboy interview in September’s issue, which hits newsstands today, could potentially violate a strict quiet period regulators expect firms to observe around IPOs.

Google Friday morning called the article a "risk factor" in its revised IPO filing.

According to a Google filing made early Friday morning, if the interview were held by a court to be in violation of securities rules, Google may be required to repurchase the shares sold to purchasers in the offering at the original purchase price for a period of one year following the date of the violation.

Because all written communications about an offering have to be included in documents filed with the SEC, most companies don’t comment on company strategies or plans, particularly to the media. Google itself has imposed a sweeping nondisclosure agreement on its own bankers who are handling the auction.

Lately, the SEC has targeted IPO companies that leak information.

Salesforce.com was forced to delay its IPO after the company's chief executive, Marc Benioff, gave a wide-ranging interview to The New York Times earlier this year.

Playboy says the interview was conducted at the Mountain View, Calif.-based company’s headquarters on April 22. Google first announced its plans for the unconventional offering in an April 29 filing with regulators.

Co-founders Sergey Brin and Larry Page told Playboy that they've spent a lot of time thinking about how the IPO will change the corporate culture at the company.

"I worried as we got bigger and there were new pressures on the company," Page told Playboy. "It wasn't so long ago that we were all on one floor. Then we moved to a new, larger office building and were on two floors. We added salespeople. Each change was huge and happened over a very short period of time."

Page said he wasn't worried that Google would make the mistake of other tech firms that held IPOs, only to fall apart later.

"We've been around for five [years]. We're at a pretty significant scale, too. We have more than 15,000 advertisers and a lot of salespeople. Millions of people use Google. It's a completely different thing."

In the Playboy interview, Page and Brin said that privacy concerns were overblown with its Gmail service, which links targeted advertisement to its free email service.

"All we're doing is showing ads," Brin said. "It's automated. No one is looking, so I don't think it's a privacy issue. To me, if it's a choice between big, intrusive ads and our smaller ones, it's a pretty obvious choice. I've used Gmail for a while and I like having the ads."

Google began accepting bids for shares in its IPO auction today. The company said it will set a final price for the shares next week.

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