Aug. 17 (Bloomberg) -- Google Inc.'s plan to sell shares today in a $3.47 billion initial public offering was delayed because the U.S. Securities and Exchange Commission didn't act on the company's request to approve its stock registration.

``The registration statement filed by Google was not declared effective at close of business today,'' said SEC spokesman John Heine. He declined to say when Google's registration would become effective. Federal law bars an IPO from going forward until an effective registration is issued.

The delay raises the possibility that Google's paperwork may be incomplete or contain errors, said Thomas Curran, an attorney with the law firm of Edwards & Angell LLP in New York. Twice this month the company told investors it may have run afoul of SEC regulations governing stock sales.

``It wouldn't be surprising, given all the things that have gone on with this auction, that they haven't dotted all their `i's' and crossed all their `t's,''' said Curran, a former securities-fraud prosecutor. ``It could be that they just screwed up somehow.''

Google spokeswoman Cindy McCaffrey declined to comment on whether there are problems with the company's registration. Morgan Stanley and Credit Suisse First Boston are leading a group of 28 underwriters in the share sale. Morgan Stanley spokeswoman Melissa Stonberg and CSFB spokeswoman Mary Claire Delaney declined to comment.

The company said in a filing with the SEC on Aug. 4 that it failed to register 23.2 million shares distributed to employees and consultants. The company offered to buy back the shares and yesterday disclosed that SEC was investigating the matter.

Seeking Permission

Last week, the company said an interview with founders Larry Page, 31, and Sergey Brin, 30, in Playboy magazine might have violated SEC disclosure rules. The company said that if a court found it did break the law it may be required to repurchase shares sold in the IPO.

Yesterday Google said on its IPO Web site that it had asked the SEC to declare its auction effective at 4 p.m. today, and that the underwriters helping with the IPO might accept bids as soon as an hour later. That would have cleared the way for the company to set a price for the stock, leading to distribution of shares and the start of trading.

The company still had a notice on its IPO Web site at 7:45 p.m. San Francisco time indicating that it had asked the SEC to declare the registration effective.

The company is using a so-called Dutch auction for its IPO. In a Dutch auction, bidders enter prices, with the lowest price needed to sell all the shares becoming the final price.

Dutch Auction

Google had said in SEC filings that it planned to sell 25.7 million shares for $108 to $135 each. The company will sell 14.1 million of the shares, while officers, employees and other insiders will sell 11.6 million, according to company SEC filings.

The auction may also be responsible for the delay, said David Martin, a lawyer with Covington & Burling and a former director of the SEC corporate finance division.

``It could be that the company did not have its ducks lined up and did not get all the information it needed to file about the Dutch auction,'' he said

He said the agency also may be reviewing several amendments Google filed to its original IPO prospectus.

Some analysts said the delay may be short-lived and that Google will get approval to proceed with the offering.

``It just means the SEC works on their schedule, not Google's,'' said David Menlow, president of research firm IPOFinancial.com in Milburn, New Jersey. ``This really is becoming a circus event.''

Google's IPO coincides with dwindling demand for share sales in new public companies as U.S. equities markets decline. The Nasdaq composite Index has fallen 12 percent since July 1.

This month 13 companies have delayed or withdrawn their initial share sales in the U.S. and eight companies withdrew or postponed their IPOs last month, according to data compiled by Bloomberg.

To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net.

Last Updated: August 17, 2004 21:43 EDT