Russia thwarts Google acquisition of ad firm

Russian antitrust regulators have blocked Google's acquisition of ZAO Begun, an online advertising unit of Rambler Media.

The companies had agreed to the terms of the $140 million acquisition in July, but Russia's Federal Antimonopoly Service said "nyet." According to Svetlana Gladkova's translation of a Russian news report, the reason is that Google hadn't submitted complete information on employees in Russia, so the FAS couldn't evaluate the deal's consequences.

Google is evaluating its next move.

"We 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. At this time we are reviewing FAS's decision. Once this process is complete, we will decide on our next steps," the company said in a statement.

Google already is tangling with antitrust authorities in the United States, Canada, and Europe over a search-ad deal with Yahoo.

(Via Google BLogoscoped.)

[tacit]

The Russian political structure knows about the Internet? Excellent! Now if only Russian authorities could be moved to do something about the virus writers and online identity thieves who live openly in Russia without fear of consequence.

[sythara]

Why? Its not hurting Russians. Viruses and online identity thieves mainly target western europe and the US.

Would you want to (lets say) stop American freelancers from launching viruses against China?

didnt think so.

[ProfyCom]

Not only Russian political people know about the internet, our president actually fondly names it "our favorite internet" now and then :)

And I'm afraid you don't follow news from Russia as closely as you hope you do as we constantly have various lawsuits against people violating various internet-related laws - though I have to admit it is only the beginning for the country. By the way, you are aware that we have Kaspersky Labs so we don't only write viruses but we fight them as well.

[tacit]

Yes, actually, I would stop American freelancers from writing viruses targeted at China. Permitting identity thieves and fraud artists to operate with impunity in a country hurts that country, even if the criminals only target foreigners. This sort of behavior discourages people from investing in your country, because they know that the rule of law doesn't apply to criminals in your country who target them. It feeds corruption in law enforcement and the judiciary; Russian law enforcement is FAMOUSLY corrupt. It undermines trust in your business structure; Nigeria, for example, will never be anything more than it is right now, because no sane businessman would ever do business with them (many companies I have worked with refuse to do any business of any sort whatsoever, across the board, with Nigeria because of its rampant fraud and crime directed at foreigners). Permitting crime targeting at foreigners is shortsighted and stupid.

As for Russia taking action against computer criminals: Talk to me again when the people responsible for the Storm worm are in custody. Should be easy; everyone knows who they are, they brag about it. Or perhaps when arrests have been made against the Russian Business Network, or when the people in the Zlob gang are apprehended. That should be easy, too; hell, some of them not only brag about their virus writing, they post pictures of themselves on Flikr. I also might be more inclined to believe you when Leo "Badcow" Kuvayev, head of the Russian Spam Gang which has ties to everything from carder fraud to identity theft to money laundering to child pornography, is taken into custody; he's also easy to find, and has multiple indictments against him in several countries already.

[sanenazok]

I think Russia would approve only if Google "sells" a controlling share of its company there to the government for lets say 1 ruble. Welcome to doing business in Russia!

[sythara]

You're not making any sense. Do you know a single thing about doing business with Russia?

[sanenazok]

Sure ever hear of a little outfit called Yukos? They sure had a good time doing business in Russia. What about the TNK-BP deal? That sure went well...after the project was sold off to the government for 5% of its value. Where else is the world is this happening? Zimbabwe, maybe.

[sythara]

When one only hears one side of the story told through the eyes of someone on the outside, of course its easy to formulate an opinion that is inconststent with the real world facts... but I digress.

As I mentioned before, US is doing the same thing just covering it up on a different lelvel (financial bailout, bank nationalization, etc)

[sanenazok]

US is bailing out banks that would otherwise fail. Yukos was *stolen* to ensure Gazprom has a monopoly market share. Tiny difference - U.S. takes over banks doing badly, Russia extracts shares from successful companies.

[TheOrginalNetguru]

Why do you say that Sythara? Are you telling us that the Russians haven't completely rolled back democracy (like taking over the gas and oil companies)? Sanenazok is correct. I bet they would agree if google said they could own a share.

[sythara]

US taking over banks isnt rolling back on democracy, whats your point. (Neither Russia nor US are actual democracies in the first place. They both are democratically elected Federal Republic Governments).

[lxa]

According to the russian text, the reason to block the deal was that Google hadn't submitted information on it's employees not only in Russia but also in other countries!

[sanenazok]

What did you expect? Of course there'll be an "official line" that's plausible. The only problem is that what, Russians are the only ones that have a functioning regulator that just happened to notice this problem? I don't think so, if Google fails to disclose necessary details as a matter of course, other countries would also refuse Google's suggested deals. A country like Russia would never admit to doing something wrong, it's always for a proper official reason.

[ProfyCom]

Too strange - at the time I was writing the post quoted here the only source available referred to Google's employees in Russia only, other countries were not mentioned.

[lxa]

Here's the text from the article mentioned in this post. "The reason is that the FAS were not made available to all staff of Google, working both in Russia and abroad". The text was translated using Google Translate.