Google Acquires Russian Ad Company Begun

July 18th, 2008 at 12:00 am

 begun contextual ads

Google has acquired Begun , a Russian contextual ads service company for $140 million according to a press release from Rambler Media .

"Rambler Media Ltd. (“Rambler” or “the Company”), operating one of Russia’s most popular internet brands, announces that it has agreed to sell its contextual advertising company ZAO Begun (“Begun”) and related subsidiaries to Google. Rambler currently holds 50.1% of Begun. The transaction will consist of Rambler buying the remaining 49.9% stake in Begun from Bannatyne Limited, affiliated with the Finam group of companies, immediately after which Rambler will sell 100% of Begun to Google subject to certain approvals and conditions precedent for a total cash consideration of US$140 million, of which US$69.9 million is attributable to Bannatyne, with customary closing adjustments." 

Begun was owned by Rambler Media, a UK registered Russian firm and Bannatyne Limited.  The two companies split Begun 50.1% and 49.9% respectively.  Under the terms of the deal, Rambler Media will first buy the 49.9% share of Bannatyne and then sell the entire Begun to Google.

Begun is a contextual ads service that serves Russian search engines and portals.  The acquisition gives Google a strong foothold in Russia’s search market which according to recent data has grown 200% since 2006.  The contextual advertising market now in Russia is worth $225 million.  That market is controlled by Russia’s largest search engine Yandex (64%) which has been online since 1997.  Google is keen to take its share of the Russian contextual ads market as well which is the main reason for the acquisition of Begun.  Predictions say that the market will increase to $685 million this year.

For now, Rambler Media will be using Google Adsense.