Russia has stopped the acquisition of a company by Internet search giant Google. The Russian Federal Antimonopoly Service (FAS) blocked Google from acquiring Zao Begun, a text-advertising and contextual-search company owned by Rambler Media. Zao serves more than 143,000 Russian-language Web sites.
“We are very disappointed to hear that FAS has come to this decision,” said Vladimir Dolgov, Google’s business manager in Russia. “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.”
“At this time we are reviewing FAS’s decision,” Dolgov added. “Once this process is complete, we will decide on our next steps.”
The FAS said it received a petition from Kokuna Holdings Ltd. (owned by Google) about purchasing all the shares of Zao. After studying “the received materials and information on the transaction, FAS Russia, governed by Clause 5 Part 2 Article 33 of the Federal Law On Protection of Competition dismissed the petition,” FAS says on its Web site.
FAS’s chief, Igor Artemyev, told a Russian online publication that Google had not provided accurate and adequate information about the acquisition.
When Google announced the deal with Rambler in July, the company said the acquisition would give advertisers access to a broader network of sites. Google has been working to gain a larger market share in Russia and planned to build on Zao’s experience building advertising, dealer networks, and direct sales in Russia.
Rambler had planned to use Google’s AdSense technology on its Web sites. The company, which already owned 51 percent of Zao, was in the midst of acquiring the remaining shares from Finama Bannatyne to sell the entire company to Google.
Google has struggled to gain market share in Russia. Cofounded by Moscow native Sergey Brin, Google hasn’t been well received…