Google inks search deal with Russian site

Tue Nov 25 2008, 15:09 PM

Google is expanding its presence in Russia with a deal to provide its search engine on popular social network Odnoklassniki.ru. The arrangement will see the firms share advertising revenue and will bring Google between USD1.5m and USD2m next year, according to Russian daily Komersant. Odnoklassniki's president Nikita Sherman confirms the site is trialling Google's search engine but would not disclose further details. The head of Google Russia, Vladimir Dolgov, also confirms the deal.

Deal Details

Odnoklassniki, which means 'classmates', has around 12.2m unique visitors every month, according to data from Taylor Nelson Sofres. The move is part of Google's strategy to expand its presence in Russia, one of the few European countries where it does not dominate the search market. The US firm tried to buy Russia's largest provider of contextual ads, Begun, earlier this year, but the country's antitrust authority blocked the deal, saying the search giant failed to provide all the necessary information. The decision was seen by industry insiders as an attempt by the Russian government to prevent Google from gaining too much power in Russia.

Odnoklassniki is majority-owned by Digital Sky Technologies, an internet fund that controls portal Mail.ru. Odnoklassniki 's founder Albert Popkov and his wife own a 21% stake in the site through an offshore firm. The firm reported a net loss of RUB19.8m (USD721,000) last year, on revenues of RUB23m (USD1.2m).

Last week, Russian conglomerate Gazprom Media bought local video-sharing site RuTube for an undisclosed sum - rumoured to be in the USD15m range. RuTube, a clone of YouTube, attracted 2m visitors in Russia in September. In a comparison, market leader YouTube had 2.9m viewers in Russia in the same month.