Google’s takeover of Russian online advertising company blocked

The Russian FAS has rejected the request of a subsidiary of Google to acquire Begun, which specializes in targeted online advertisements for text and video.

Google announced its proposed acquisition of Begun in July this year. Rambler Media, which owns 50.1 percent of Begun, and Finama, an investment fund, agreed to sell the online advertising company to Kokuna Holdings Limited, a Google subsidiary based in Cyprus. The acquisition was for an amount of 140 million dollars. Russian antitrust regulator FAS has now put a stop to the purchase.

The FAS gives as the reason for the rejection that the application for the takeover is not complete. “Google has provided incomplete information about the group of companies and activities of several subsidiaries, which is why we are rejecting the application,” said Andrei Kashevarov, spokesman for the FAS. Google is free to resubmit the application. Unpleasant allegedly Prime Minister Vladimir Putin is said to have had a hand in the rejection, but Putin’s press officer Dmitry Peskov denies that the prime minister interfered in the matter.

Second in the Russian online advertising market, Begun has a network that includes 40,000 advertisers and 143,000 Russian-oriented websites. The total market for targeted online advertising in Russia is approximately US$220 million. Market leader Yandex, which wants to go public this fall, is surprised by the decision of the FAS. The company had hoped that no such intervention would take place.