Friday, September 19, 2008

The story of how Begun owner changed

In runet sostoyalyas one of the largest deals in its history. Google has bought a Rambler Media Russian service contextual advertising «Begun». The official amount of the transaction - about $140 million addition to the transaction, the company also entered into a cooperation agreement. Google will enhance search engine «Rambler» through its algorithms and will be available on the site of the Russian contextual advertising. Google will also share with «by Rambler» proceeds from the sale of the advertising.

Analysts surprisingly unanimous: «Begun» - the largest and return on assets «Rambler», but the company has not had an opportunity to effectively develop its. Now «Rambler» focus on the development of media and service areas, and the sale of «Begun» just give the necessary funds. Interestingly, the negotiations for the sale of «Begun» were another foreign Internet companies - Yahoo. However, Google offered better conditions and eventually became a buyer. It turns out that for second place in the Russian market contextual advertising Google, in fact, and paid a $140 million, or almost 740 thousand dollars for each employee «Begun». So, the Russian service contextual advertising sold to the global Internet giant for $140 million The money is divided between the sellers «Begun» - «Rambler Media» (owner of a controlling interest - 50.1% stake) and an affiliate of the investment holding company «Finam» (49 , 9% stake «Begun»). Close the deal is scheduled in September. During the transaction «Rambler» purchase from the «Finama» his share of Google stock and sell 100 per bag. As a result, «Finam» will receive $69.9 million, while net profit «Rambler» after all transactions of approximately $50 million For comparison: the entire LiveJournal, with its 14 million users cost the company SUP in the $30 million recall that Rambler obtains control «Runners» in August 2007 th, dokupiv 25% of the company. In March 2008, «Begun» became the exclusive seller of contextual advertising on the pages of resources Rambler. Meanwhile, Google reached an agreement with Rambler something about it. Under the agreement signed by the two companies seek to will be enhanced searching Google. Together with the issuance of a search Rambler will display ads Google AdSense. Give Google search, «Rambler» will also receive at least 50% of profits as a partner. That is holding maintained its sales and even once received a $70 million.

Comments parties to the transaction:

Mark Opzumer, general director of the holding company Rambler Media: «Begun - an excellent business that can fully develop their potential, under the leadership of Google. Google has the technological and financial capacity to further develop the service «Begun» in Russia ». Alexei Basov, CEO of «Begun»: «This agreement will benefit the entire industry because it opens up great opportunities for cooperation. This would allow Google to combine innovative technology with the successful experience of six companies «Begun» to build an advertising and dealer network, as well as direct sales in Russia ».

It should be noted that Google pays it for outreach and advertising network «Begun», and not for his engine. This means that customers «Begun» will be eventually transferred to the engine Google, and the main question - how much pain will be for them this association. It is possible also that «Begun» - not the last acquisition by Google in Russia: the service contextual advertising may follow, and playground. As a result of absorption «Begun» in the Russian market contextual advertising will remain only two major players that control about 95% of the market: «Yandex» and Google. «Yandex» now has a market share of over 50%, it remains the leader. Nevertheless, with the advent of Google's «Yandex» slightly increases the probability of losing leadership in the future. Not immediately, but in the perception of advertisers formed the stereotype of the existence of two roughly equal sites for posting ads, and pooling of resources and Google «Begun» play a role. As a result, budgets for Google and «Yandex» will be equalized. Google himself agreement would allow greater gain in high growth markets of Russian Internet adverts. At this year market growing at 50%, and by 2010, analysts estimated, the volume will exceed one billion dollars. As now say top managers «Rambler Media», proceeds from the sale of share ownership in «Begun» will be used for further investment in technology development and strengthening of the news content as well as new acquisitions. After completion of the transaction, the «Rambler Media» will be $100 million, the most interesting segments for investment in the company believe search technology, communication and entertainment projects. Apparently, sales of «Begun» seriously reduce profits «Rambler», which will now be earning on their sites from the new owner of an advertising system. However, as a result of the transaction «Rambler» loses partner network, but the contribution of partners in revenue «Begun», and so was negligible. At one time, «Begun» was the best investment «Finama». In 2003, «Finam» bought the whole company for $0.75 million now, he will receive from the Rambler $69,9 million - in addition to the $18.75 million paid by Rambler in 2005-2007 to 50,1% «Begun». Total Investment earns $87.9 million, or yield to exceed 1000% per annum. The company «Yandex», which is not going to sell out, and plans to compete, made through your blog with an official statement about the deal around «Begun»:

«Rambler» and Google announced an agreement - Google becomes the search for and buys a «Rambler» system of placing ads «Begun». Thus disappears oldest search engine Runeta - «Rambler» and the changing landscape of the Russian Internet. Naturally, «Yandex» received numerous requests for comment this transaction, and therefore we decided to answer all at once. We believe that this deal, Google does not so much buying a business «Begun», but receives additional share of the Russian search market through «Rambler». According to statistics LiveInternet, the last six months «Yandex» able to maintain the proportion of search traffic at the level of 54-55%. Share Google has recently stabilized at 21-22%. If you see a long statistics show that the previous growth Google was mainly due to the search «Rambler», whose share fell to 11% and close to the search portal (8-9%), working on technology «Yandex» . After the transaction remains in RuNet two search engines: Google and «Yandex» (share of each of the other search does not exceed 1%). Russia is one of the few countries that has its own search technology, dominant in the market. In this variety except Russia faces China, Korea and the United States. His competitive search technology is not proven, in particular, in any country in Western Europe. However, only two countries in the United States and Russia, to find enough engineers to create more than one technology, with a significant market share. In Russia the main systems were «Yandex» and «Rambler». We are very sorry that it is now a Russian search technology will disappear. By colleagues from Google professionals «Yandex» always treated with great respect. We are interested in for many years to compete with global companies such level. Russia remains a difficult market for global Internet players. Services Yahoo! and Microsoft, despite the Russification of interfaces, and do not have any noticeable Russian users. A Google in Russia went to such unconventional steps for themselves how extensive advertising campaign or buying a local player ».


The group Rambler Media includes Internet search engine, online media,, Rambler-ICQ, etc. Revenue «Rambler» in 2007 increased by 125% - to $69.1 million now, according to the statistics service Liveinternet, «Yandex» handles 54% of search queries in runet, Google - 21%, Rambler - 11%.
«Begun» - contextual advertising system. The number of advertisers in the system is 40 thousand, the number of partners - 143 thousand Revenue «Begun» from providing services in 2007 amounted to 1.085 trillion rubles. The bulk of the proceeds «Begun» receives from placing ads on Internet sites «Rambler». 50,1% «Begun» has «Rambleru», 49,9% - an investment company «Finam».

It is estimated the company PricewaterhouseCoopers (PwC), the Russian market for Internet advertising in 2007 increased by 52% - up to $352 million in «Begun» believe this assessment underestimated. The company estimates that the 2007 market for Internet advertising reached $400 million, while segment contextual advertising accounted for $210 million projected to PwC, in the long term average annual market growth of 40% and in 2012, revenue from advertising in runet reach $19 billion must say that the sale «Begun» for such an impressive sum - no evidence of weakness, but rather forces «Rambler». It is precisely the company «Rambler Media» released financial results of the first half of 2008 th. Revenues company has more than 150% compared to the 1 st half of 2007. Revenues of the group of companies (including proceeds «Begun») amounted to $52 million - a 153% higher than that of 2007 th. Consolidated revenues from contextual advertising for the period rose to 5.5 times and amounted to $23.5 million, from the media/banner advertising - $21.8 million (an increase of 94%). Revenues from paid search grew by 62% to $6.9 million partner network «Begun» added to the consolidated revenue $16.6 million According to analysts, while core earnings growth «Rambler» was to consolidate «Begun», acceleration of organic growth Revenue associated with successful sales in the II quarter of banner advertising, which increased by 42% compared with I quarter. There seems to move the company from minute to dynamic pricing in 2008 is beginning to bear fruit - the profitability of advertising space on the web «Rambler» has been rising. On 30 June this year, «Rambler Media» employed 509 people, not counting the 191 staff members «Begun». Percentage of staff costs to sales declined from 43% last year to 30% in the first half of 2008 is estimated «Rambler», its monthly audience averaged in the first half of 37.3 million unique visitors, a 30% above last year's figures. In May 2008 the first number of «unique» reached 40 million, which is 35% higher than the same figure for May last year. Incidentally, during the last half «Rambler» acquired the remaining 49% stake and now owns 100% stake. «Rambler» now plans to move toward «portal» - development of additional services like The company has already confirmed the previously articulated forecast earnings for 2008 - $100 - $110 million.

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