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Google sets aside $500m for US DoJ investigation into ad practices

Google has earmarked $500m to settle a US Department of Justice investigation into its advertising practices.

Analysts say the measure is the first indication US regulators have found fault with Google's core advertising business.

Google said in its quarterly filing with the Securities and Exchange Commission that the measure had cut net income to $1.8bn from $2.3bn for the first quarter.

"Although we cannot predict the ultimate outcome of this matter, we believe it will not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows," Google said in the filing, according to US reports.

Google gave no details of the complaint against the company, saying only that the money had been set aside in connection with a potential resolution of an investigation into the use of Google advertising by some advertisers.

But Google-watchers say the measure indicates regulatory concerns about Google's failure to police adequately the use of its advertising system, according to the Financial Times.

Google, Yahoo and Microsoft have all fallen foul of US regulators in the past over their search advertising systems.

In 2007, the three search companies were fined $31.5m over the way offshore gambling companies used the systems to reach customers in the US.

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