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Microsoft Announces $300m Russian Expansion

According to the Moscow Times, Microsoft will be investing 10 billion rubles ($300m USD) in Russia over the next three years. The announcement was made on Monday by Microsoft CEO Steve Ballmer at a press conference in Moscow.

steve-ballmerAside from expanding the company’s investment into software for students and startups they will also invest in “sectors that are not directly software related”.

It’s unclear how much of this investment, if any, will be spent on promoting their MSN/Live search in Russia. So far Google is the only Western search engine to gain market share in the country, competing with Rambler and market leader Yandex. According to the third-party statistics site, LiveInternet, MSN (0.5%) and Live (0.5%) do not hold much market share in Russia.

Microsoft’s new plans to penetrate the Russian market are not so different from other Western IT companies such as Google, said David Ferguson, an analyst at Renaissance Capital.

“The Russian IT market is still pretty much dominated by local players, and it’s all about trying to strengthen your position in the market,” he said. “The company’s current strategy would likely open ways for the company to both expand its Internet services and defend the market share of its Microsoft Office products during a push for open software here. Both initiatives require the support of the state”.

“There’s massive opportunity in this market, but probably both [software and the Internet] are relatively politically sensitive. You probably have to give to receive, and investments of this kind are probably a way toward building a bridge,” Ferguson said.

** Steve Ballmer by MSDPE one of the artists who make their work under a Creative Commons license at Flickr – thank you!

About Anna Wilsdon

Nick Wilsdon works as a Content and Digital Strategy Consultant He manages online campaigns for the UK's leading telecom, finance and FMCG brands.

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