Google Takeovers Ad Firm Begun
Google is known to achieve something or the other on a regular basis, and it has proved the same yet again. Russian online site Rambler Media has confirmed about selling its advertising unit, ‘ZAO Begun’ to the Internet search King, and using its technology for search as well as advertisements.
Currently, Rambler owns 50.1% of Begun, however will acquire the other 49.9% from Bannatyne and then sell it off completely to Google for a massive $140 million in cash, said the company. It also said that $69.9 million will be paid to Bannatyne out of the entire total. Eventually, Rambler expects to end up with around $50 million from the agreement, which it will keep aside for investment and potential acquisition purposes.
The deal highlights the expansion plans of Google in order to penetrate the Russian market, where portal ‘Yandex’ influences the local search users even today. With above 40,000 advertisers, Begun comprises of more than 143,000 sites in its partner network, all of them being Russian-language, said Rambler.
As far as advertising is concerned, Rambler will make use of Google’s AdSense for Content as well as AdSense for Search features.
Google’s Managing Director for emerging markets, Mohammad Gawdat said that the deal illustrates the company’s commitment to invest in the Russian territory, where online advertising is presently going through rapid growth stage. He also expressed excitement regarding the opportunity to provide even more relevant search and ads to users and offer publishers and advertisers with enhanced advertising technology to assist them flourish in their own commercial operations.
About Begun:
Begun was initially owned by Rambler Media, a UK registered Russian company and Bannatyne Limited. It was bisected by the two firms into 50.1% and 49.9% respectively.
Begun is known for providing contextual ad services to Russian portals and search engines.
How Google Benefits:
The Begun acquisition provides Google a powerful foothold in Russia’s online search market, which has shown a 200% increase since 2006 according to a recent data. Interestingly, the contextual ad market in Russia now stands at $225 million. Considering these opportunities as well as to dethrone the Russian search leader Yandex, Google is looking forward to capture a huge share of the Russian contextual ads market, thereby acquiring Begun. Moreover, according to some predictions, it is believed that the market will grow to $685 million in 2008.
