Iron Curtain Falls On Google's Russian Ad Deal

Russia's Federal Anti-monopoly Service, FAS, has blocked a move by Google to purchase Begun, an advertising agency. The watch dog group claims they blocked the deal because Google did not provide them with enough information to allow FAS to access whether or not the deal would help or hurt competition.

Google's bid on Begun was reportedly $140 million.

"Having reviewed the documents and information received relating to this deal, FAS on Oct. 22, 2008, made a decision to refuse to satisfy the appeal," FAS said in a statement on its Web site.

FAS, the Russian anti-monopoly watch dog, was stepped up its efforts ever since Vladimir Putin, the Prime Minister, declared that the service be more active. As FAS ratchets up its involvement in Russian commerce it could very well become one of the more powerful agencies in the country.

The search engine giant began talks with Rambler Media in July of this year to purchase the ad company. Begun is the largest contextual advertising network in the Russian Internet, Reuters reports.

But, for now, Google's expanding ad empire will be put on hold.

"We are very disappointed to hear that FAS has come to this decision since 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," Google Russia PR director Alla Zabrovskaya told Reuters.

However, the road block doesn't mean that Google will drop its intent to purchase the company.

"At this time, we are awaiting the FAS's decision. Once the review process is complete, we will decide on our next steps," said Zabrovskaya.