Google sets aside $500M for Department of Justice

Google is peering down the barrel of a possible $500 million charge as the Department of Justice completes its investigation into the company's advertising activities - and already considers the money as good as gone.

According to a regulatory filing made by the company yesterday and first spotted by The Wall Street Journal, Google has set aside half a billion dollars in cash "in connection with a potential resolution of an investigation by the Department of Justice into the use of Google advertising by certain advertisers."

The filing warns investors that the money is pretty much spent, and drops the company's earnings per diluted share to $5.51 - down from $7.04 in the previous month. While the company is still making money hand-over-fist, it's a serious hit - and one that won't help allay investors' concerns over the increasing regulatory pressure the advertising giant finds itself under.

With Google having announced the introduction of music streaming and film rentals to its Android mobile platform at the opening of yesterday's Google I/O conference, that's a whole new area for regulators to get in a tizz about - and if Google takes a half-billion hit each time, the numbers will soon add up.

While full details are not yet known, the Department of Justice investigation is believed to centre around the means by which Google's automated advertising management system decides which adverts should be shown - with an unknown list of complainants telling the DoJ that they've been treated unfairly by the algorithm.

According to the filing, Google doesn't expect the decision to "have a material adverse effect" - suggesting that taking a $500 million hit from a government regulatory body is seen as just another cost of doing business for the advertising giant.

Now that Google has been overtaken as the world's most valuable brand by shiny-thing specialist Apple, times would appear to be getting rough for what was once Wall Street's golden child - and with the company facing another probe over its location-tracking technology, things could get worse before they get better.