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RealTime IT News

Google Square with SEC

Google has reached an agreement with the Securities and Exchange Commission regarding its failure to register stock options issued to employees, according to a financial document filed on Thursday.

When Google handed out some 23.24 million shares of stock and 2.5 million options to employees and contractors between 2002 and 2004, it neglected to register them with the SEC, violating Rule 701 of the Securities Act of 1933. The goof also was against the laws of 18 states and the District of Columbia.

In August, in advance of its IPO, Google had to offer to buy back all those shares at the price paid, which ranged from $0.30 to $80 per share, with a total worth of about $80 million. (The final price of IPO shares was $85; the shares jumped to $100 on the first day of trading.)

According to today's SEC filing, Google General Counsel David Drummond made a settlement offer to the SEC, and it was accepted. Without admitting fault, Google promised not to do this particular evil again.

Mountain View, Calif.-based Google made a similar deal with the State of California, according to SEC documents.

The SEC decided to drop its investigation into whether an interview granted by Google co-founders Sergey Brin and Larry Page to Playboy magazine violated SEC quiet-period rules and could have hyped the stock in advance of the IPO.

A Google spokesperson said, "We are pleased there will be no further proceedings regarding the Playboy article and satisfied with the settlement on the stock option issues. We're glad to have these issues behind us."

While Google remains the search leader, a new study by Keynote Systems shows that rivals may be gaining ground when it comes to customer experience.

The Keynote Customer Experience Rankings for the Search Engine Industry are based on research with 2,000 consumers as they use search engines. Keynote's technology collects detailed qualitative and behavioral data as users perform tasks at each site.

Since the last study, Keynote reported on Thursday, Yahoo has boosted the number of users who said they would consider the site as their primary search engine by more than 20, while MSN gained almost 30 percent. Without putting a number on it, the report said Ask Jeeves also showed a significant increase in its overall customer experience.