Russian Antimonopoly Authorities Block Google Acquisition of Zao Begun

By Eric Blair
23:03, October 24th 2008
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Russian Antimonopoly Authorities Block Google Acquisition of Zao Begun

The Russian Federal Antimonopoly Service has recently blocked the acquisition by Google of Zao Begun, a search-and-contextual-advertising company owned by Rambler Media, a Russian company that maintains several websites, including a search engine.

The deal, valued at $160 million, was blocked by the FAS because, according to its head Igor Artemyev, Google did not provide reliable and sufficient information about those persons who can influence the company’s economic operations; neither did they publish the full list of owners. Thus, FAS was unable to calculate the possible consequences of the deal, and if it would help or hurt competition. Google will have to file a new request for approval, said Artemyev.

Google meanwhile expressed their dismay in a statement by saying that they “are very disappointed to hear that FAS has come to this decision, we strongly believe that this acquisition will enable us to significantly improve opportunities for Russian users, advertisers and publishers as well as the entire industry."

The deal, when it eventually goes through, will bump Google’s claim on the Russian market from its current meager 5%, to include the 20% that come with the Begun territory. This will put it toe-to-toe with its biggest competitor, Yandex, which owns 64% of the market right now.

All of this ado is secondary though, when we bring to mind Google’s other trouble regarding advertising deals, namely the ongoing review by the U.S. Department of Justice, which has so far delayed by a month their advertising deal with Yahoo, which would have the latter show the former’s ads.



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