Google Reinforces Its Russian Front With Ad Company Acquisition - InformationWeek
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7/18/2008
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Google Reinforces Its Russian Front With Ad Company Acquisition

The deal to buy ZAO Begun, a Russian contextual advertising service, marks Google's first publicly disclosed acquisition since last October.

Having paused for half a year to digest the 16 companies it acquired in 2007, Google is hungry again.

On Friday, Google said that it had reached an agreement with Rambler Media to acquire ZAO Begun, a Russian contextual advertising company, for $140 million.

The deal marks Google's first publicly disclosed acquisition since it bought mobile blogging service Jaiku last October.

By acquiring Begun, Google aims to provide advertisers with a broader network of sites on which to place ads.

"Google is very committed to giving Russian users, advertisers, and partners the best possible service and experience," Mohammad Gawdat, Google's managing director of emerging markets, said in a statement. "This agreement will result in better search results and more relevant advertising for our Russian users and publishers."

According to Rambler Media, which acquired a controlling stake in Begun in August 2007, Begun's contextual ad platform includes 35,000 individual advertisers and more than 50,000 partner distribution sites.

Rambler Media, which saw 40 million unique visitors to its sites in April, also said that it had signed a search and advertising deal with Google. As a result of this agreement, search queries on Rambler's home page and search function "will be enhanced by Google," Rambler Media said in a statement. "Rambler will display Google ads alongside natural search results."

In February, Yandex was the leading search site in Russia with 47.4% of all searches, followed by Google sites (31.2%), Rambler Media sites (9.7%), Mail.ru sites (7%), and Yahoo sites (1.3%), according to comScore.

Google's purchase of Begun and its alliance with Rambler Media represent an obvious effort to challenge Yandex's lead in the Russian search market. In many ways, what Google is trying to do with Rambler Media and Begun in Russia is analogous to what Microsoft has been trying to do with Yahoo in the United States.

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