Google sets aside $US500 million for potential lawsuit, unveils Chromebook laptops

Internet giant Google has set aside $US500 million for a potential settlement over an investigation spearheaded by the Department of Justice over the company’s advertising program.

The revelation, which was made known in an official filing to the Securities and Exchange Commission, came alongside some new announcements Google made at its annual I/O conference, including the release of new Chrome-based laptops manufactured by Acer and Samsung.

Google said in the filing it has set aside the cash in order to pay for a potential settlement in an investigation, but it has left tech experts wondering what exactly the investigation is for.

“In May 2011, in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $US500 million for the three month period ended March 31, 2011,” Google said in the filing.

No further details have been provided, although Google said the money won’t have a material effect on the business. It also said it cannot predict the outcome of the investigation.

This isn’t the first time Google has been investigated by regulators – most recently it has been dragged into a fight against three European websites which believe Google is abusing its power by lowering their search rankings.

The company has also been involved with several lawsuits and investigations. Representatives testified before Congress this week over mobile privacy concerns which arose after Apple said its iPhone hardware accidentally captured too much user location data.

As a result of the announcement, Google updated its financial data, available on its website.

According to The Register, rumours suggest the investigation could be related to search advertisements, as well as organic search practices.

Meanwhile, Google announced a range of new updates for its Chrome products at the second day of its I/O conference, with the release of new Chromebook computers perhaps the biggest reveal of the day.

The computers, which are to be manufactured by Acer and Samsung, will be promoted as a low-cost alternative to full-blown laptops and use the Chrome operating system.

The Chrome OS isn’t new, but these netbooks are. And Google says it will be promoting them to businesses as more SMEs start focusing on the cloud – the gadgets don’t have much storage, with the Chrome OS focusing more on cloud products and services, like Gmail and Google Docs.

“Many companies have a hard time upgrading OS and most users use laptops today. They take them in and out of enterprise firewalls and this is challenging for IT admins. CIOs and IT admins are moving computing to the cloud,” product vice president Sundar Pichai said at the conference.

Citrix and VMW have teamed up with Google to provide business apps, while the Google OS team has added some new features, such as a file manager, to make the computers seem more like a typical OS.

Businesses can purchase subscriptions for the gadgets for every user per month, which will give them bandwidth over Verizon wireless as well – the Chrome OS is based on internet usage, so if users aren’t connected the computer won’t be able to use most services.

Those subscriptions will run out at the end of a three year contract.

The Samsung Chromebook will feature an eight hour battery with an eight-second boot time, while the Acer computer has a 6.5-hour battery and an 11.6” screen. Samsung’s device will cost $US425 for WiFi and $US499 for 3G, while Acer will cost $US349.

And while the launch is only in the US from June 15, Google is planning an international expansion as well, although it hasn’t specified which countries it will target.

But for now, this seems to be a major focus for Google. Co-founder Sergey Brin says the growth of the Chrome browser – it now has over 160 million users – shows users want a more simple computing experience.

“It’s a much easier way to compute… and Chromebook is venturing into a new model of computing that I don’t think was possible even a few years ago,” he told the BBC.

“Ultimately the most precious resource is the user’s time. I think the complexity of managing your computer is really torturing users out there. It is a flawed model and I think Chromebooks are a new model and this is the way things are going to be.”