I have no idea whether this is a credible story or not. According to openPR.com, Google is planning to move from California to the Canary Islands.
Because as of a sudden, an internal source states that a large-scale displacement of the entire headquarters of the U.S. search engine titan Google Inc. to Tenerife has been announced. This result was due mainly to the fact that new U.S. media laws of the Obama government will put a significant restriction to the YouTube video portal and search results of the Google Video search, according to an internal document. For quite some time U.S. courts and lawyers specialized in intellectual property right have been dealing with that matter, since more and more illegal pirate copies in so-called high definition (HD-)quality on YouTube and Google would be freely available. Assumingly the driving force behind the law seems to be the U.S. music industry that has suffered billions of losses since many years.
But also the fact plays a role that California is very close to a total bankruptcy, as the first US state ever. As it turned out, the situation is even worse than in Greece. There is even a risk of a spread over to other states. California is facing a total budget loss of 20 billion U.S. dollars (14,73 million Euro). So it lacks of the chance to proceed with further necessary investments in the electrical and networking infrastructure, as mentioned in the internal document.
This has more to do with censorship arguments surrounding proposed laws designed to protect intellectual property than any kind of sex hysteria, but Google has been taking a very high profile in the censorship wars with regard to China and Australia, so it will be a key player in internet regulation and censorship overall. Whether Google actually plans to move remains to be seen.