This week The Moscow Times has conducted a series of interviews on the state of e-marketing in Russia. Essential reading for anyone working in or considering expanding into RuNet. These should remain open to public viewing, follow the links below:

Changes in Consumer Preference on the Internet
By Inessa Ishunkina, Project director TNS Russia

RuNet of Today
By Vladimir Dolgov, Google Russia Country Manager

Opportunities and Challenges of E-Marketing in Russia
By Nick Wilsdon, CTO E3internet-Marketing

Linking Loyalty to the Customer
By Hanspeter Kipfer, Vice President Applications Oracle Eastern Europe and CIS

The Domain: Invader or Victim
By Anna Shmalyuk, Intellectual Property Specialist

Anti-Virus Software Is Not Enough
By Nick Rossiter, Regional Director Russia/CIS Symantec Corporation

It was a pleasure to be involved in this project and to see this topic getting the attention it deserves in the press here. Over the next week I’ll try and bring you some of the statistics mentioned in the articles.

Update: Added PDF copy of the articles for your reference

Technorati Tags: Domains, E-Marketing, Moscow Times, Russia

According to Interfax, Googles proposed deal to puchase the contexual ad provider, Begun.ru, for $140m was shot down by the Russian Anti-Monopoly Service (FAS) on Thursday.

The reason cited has been a lack of clear information on the “individuals who can exert influence on the activity of the Google group, as well as a list of persons belonging to the Google group, including those outside Russia”. Without this information, the FAS board do not feel they can “objectively judge the impact on competition in the market for Internet search in our country”. Plus they have “concerns” that competitive conditions will be made worse by reducing the number of large players.

Ever since the deal was announced industry experts have speculated that Begun’s future is in doubt, considering that Google has such a well developed contexual ad system and brand of its own (Adwords). The value in Begun seems to lie with their contextual contracts, trained support staff and business customers. Rumours have also been circulated that Google was planning to provide organic results to Rambler as part of the deal. Either of these moves would effectively remove players from the Russian search scene.

“We’re very disappointed”, said Google PR Director in Russia, Alla Zabrovskaya. “We continue to believe that this transaction has improved the range of opportunities for Russian Internet users, advertisers, as well as the development of the industry as a whole. We now await the decision in the hands of the FAS and then will decide on our future actions”.

This is a massive blow to Google in the Russian market, which they recently estimated to be worth $1bn by 2011. This purchase would have consolated their position against market leaders Yandex. Begun.ru provides contexual advertising streams to a range of high profile sites, notably Rambler, the oldest search engine in Russia.

According to LiveInternet, Yandex holds 44.7%, against Google with 34.6%. Rambler has seen their market share plummet this year to 7.1% from 17% this time last year, despite the appointment of Ex-Yahoo! European Head Mark Opzoomer. Mail.ru, the other major player in Russian search has seen a rise in marketshare to 7.7%. Having cancelled a deal to carry Google’s contextual adverts in January of 2007, they have since been in partnership with Yandex.

So what does this FAS ruling mean? According to RosFinCom, things may not be so bad. The deal may still go through once Google meets the demands of the FAS board. “Finam” Vladislav Kochetkov agreed, “In our view, there is a great likelihood that the transaction will soon take place”. Not so, says Alexander Kuznetsov, an analyst at ING Wholesale Banking, who suggests the FAS is just looking for formal reasons to reject the deal. He maybe right.

As Kuznetsov points out, the marketshare Google will gain is not such a monopoly. He proposes that together they would only occupy 21% of the market. LiveInternet would put that nearer to 42% against Yandex with 53%. However you can find much higher percentages in the Russian telecommunications industry that have failed to draw regulator concern. Russian industry is defined by monopolies.

If this is not due to the marketshare, could it be more to do with Google’s position as a foreign company? Russian lawmakers have been taking an increasing interest in the Internet and pushed to have it included as a sector “strategically important to national security” in a law passed this April. That would have required foreign investors wishing to purchase more than 50% of a Russian company related to the Internet to obtain the approval of the Russian Government.

The bill was amended after intervention by President Medvedev but the list of strategic sectors still includes television/radio broadcasting and publishing. Companies that hold a dominant position in providing internet and telephone services are also included. In those cases, the Federal Anti-Monopoly Service can apply “limitations”. The FAS definition of “dominant” is defined for us by Russian Law News:

Article 5 of the New Law states that unless otherwise demonstrated, a business entity with more than 50% market share is presumed dominant; and less than 35% market share is generally not dominant. However, a group of up to three market leaders may be deemed dominant if they have aggregate market share of 50%; and the same applies to a group of up to five market leaders with aggregate market share of 70% (unless one of them has a market share below 8%)

Are we currently seeing the first “limitations” placed on Google by the FAS, to prevent them developing a dominant position in Runet? The Russian authorities can be deeply suspicious of foreign companies and publicised connections between Google and the CIA are unlikely to work in their favour. It is certainly a strange request by the FAS to know more about “individuals who can exert influence on the activity of the Google group”.

Government protection would give the home-grown engine Yandex a significant advantage and prevent the market domination Google has enjoyed across US and Europe. If their advancement in Russia has just become political, this may prove to be the greatest challenge the US search giant has faced to date.

Technorati Tags: Begun, FAS, Google, Monolpoly, Russia, Russian Anti-Monopoly Service, Yandex

The Casino Affiliate Convention (CAC) is one of the largest industry events on internet wagering marketing and advertising, and also covers both internet and traditional marketing. They have invited me back to their next conference in Moscow this week to speak on the topic of Social Media in Russia.

I really enjoyed the Amsterdam Conference in 2006 so it should be good to meet up with some familiar faces this Saturday. If you want to find out more, visit the CAC2008 website.

Other speakers include Rambler, Demfire Shakurova (SEONews) and Josh Gray (PerfSpot). Full agenda for the conference can be found here.

Technorati Tags: CAC, CAC2008, Casino, Conferences, Gaming, Moscow

I’ve just about caught up from the C-IB 2008 ‘Internet and Business’ Conference last week. This is now the largest conference in Russia with 3500 people registering this year (up by 1500 on 2007). Take note SES and SMX, this scene is developing quickly and people are hungry for conferences. Admittedly the popularity of CIB has been helped by free entrance but the No.2 conference, organised by Ashmanov is also growing fast with a $685 price ticket (1100 attendees last year).

Video: It’s not a Russian Conference without Champagne.

The surprising thing for me was how upbeat everyone was about the economy and industry. Although we’ve seen rising food prices, the credit crunch hasn’t seemed to affect Russia to date. The reason for this is that during a credit crunch, cash is king and Russia is a country with little debt and lots of cash. The oil stabalization fund is running at $160bn currently and the Government under spent their budget by around $450bn this year. All in all, it’s a booming economy here and the internet is no exception.

Yandex, Rambler and all the major players have seen their profits double for the 4th year running. GazProm and other Russian powerhouses are now investing in new media, the former having just acquired the Russian video sharing site, RuTube.ru for $15m.

The C-ib conference is a great opportunity to meet all these people. One of the highlights for my trip this year was playing Mafia (Werewolf) until 5 a.m. with everyone. I’d brought my SEOMoz cards from PubCon Vegas so we soon made use of them.

It really brought it home to me how unique the Russian search industry is when no one in the room recognised Matt Cutts or any of the other SEO celebrities pictured on the cards. I promised them we’d put together a ‘Russian Edition’ for 2009.

Video: The Chocolate Fountain was very popular (especially with Anna!)

For the first time there were two English speakers present and a small handful of foreigner attendees. ComScore and Omniture were also present. The organisers had arranged for live translation in the main auditorium with free headsets, a very professional touch and hopefully one they extend for next year.

I’ll be writing up my posts and notes from the conference over the next couple of weeks. The bar-room chats will remain private though ;) My only complaint would be the over-subscribed Wi-Fi which crawled for most of the event, but considering that was a free service it still beat the offering at most US/European conferences. A hotel booking mix-up also left us staying in their $400/night suite for the duration of the conference, which was a bonus. Roll on CIB 2009!

If you have interpretation available, you can download the conference presentations (.ppt format) or watch short video interviews with the presenters.

Technorati Tags: cib 2008, conference, mafia, matt cutts, Russia, seomoz, werewolf

On the 11-12th of November 2008 will be the 7th Annual Conference by Ashmanov and Partners; “Search Engine Optimization and promotion of sites on the Internet”. Catchy title eh?

Last year 1100 people attended, including representatives from all the search engines in Russia (Yandex, Rambler, Mail.ru, Google). There is also an expo hall, where 26 businesses exhibited in 2007. The conference fee is 16,000 roubles (approx. $685).

I haven’t attended this conference yet but plan to this year. I’m not sure if translation will be provided but this was available at the recent C-ib.ru conference for the first time. I can find out nearer the time if you express an interest here in the comments. This conference is supposed to be at a more advanced level than the other conferences or seminars in Russia.

Personally I have found the information at C-ib.ru to be at a very low level. To give you an example, at one point in a seminar about advertising the speaker explained the meaning of CPM (cost per month). Igor Ashmanov himself was criticized for not giving away useful information in his presentation and keeping the material too vague. This was met with applause by the audience but he retorted that they could only expect so much from a free conference. I’ll put him to the test in November and report back.

More information and registration links can be found at Optimization.ru (Russian only)

Technorati Tags: Ashmanov, Google.ru, Igor Ashmanov, Mail.ru, Rambler, Russian Conferences, Yandex

Ashmanov & Co. are hosting the conference “Search optimisation and site promotion in the internet” on the 16th-17th November 2006 in Moscow. Yandex, Mail.ru and Google will be attending the event.

Places at the conference cost 15000r (£300/$550). Information on the schedule is only available in Russian, as it the sign-up form. I would expect the conference talks to also be in Russian.

I hope to be attending though and will report back on the event.