Russian regulators reject Google’s acquisition proposal of ad firm

Three months after Google announced its intentions to acquire ZAO Begun, the Russian advertising service, for $140 million, the Russian Federal Anti-monopoly Service (FAS) rejected the proposal. According to FAS, Google failed to provide the necessary information to help establish how the deal would affect competition.

FAS wrote on its website that after reviewing the documents presented in connection with the deal, they decided “to refuse to satisfy the appeal.”

Google was of course disappointed with the decision, and as they said in a Reuters interview, “we strongly believe that this acquisition will enable us to significantly improve opportunities for Russian users, advertisers, publishers, as well as the entire industry.”

In July this year, upon making the announcement on the future acquisition, Google said the advertisers would benefit a lot from the deal, by having access to a broader network of sites to advertise on, while the publishers will have a wider set of adverts to run on their sites.

“Begun is an excellent business which can fully develop its potential under Google's ownership," Mark Opzoomer, Chief Executive Officer of Rambler Media, said at the time. "Google has the technological and financial capacity to improve Begun's established advertising service in Russia."

Furthermore, Google also promised better search results and more relevant advertising for Russian users. The deal was especially important as the Russian market and digital advertising are experiencing rapid growth.

ZAO Begun, which is the third largest search engine in the country, is a unit of Rambler Media Group, which also owns one of Russia’s biggest web portals. The main competitors on the Russian market at the moment are Yandex, followed by Google.

(Published by eFluxMedia- October 24, 2008)