WebProNews

International expansion needed for growth

Context ads firm ZAO Begun joined Google after the search advertising company purchased it from parent firm Rambler Media for $140 million.

Google will make a stronger play for the Russian Internet audience for contextual online advertising. The company announced the purchase of Begun this morning.

Rapid growth of the search ad business in Russia served as the motivation. With shares of Google's stock underperforming the major indexes in 2008, the need for international growth became paramount for Google's leadership.

Begun's advertisers should see their marketing appear on Google's network of sites, while Google expands the reach of its advertising into Begun's network. Begun has been in operation for six years, giving it plenty of time to build up local expertise with sales and its networks.

Despite its American roots and origins, Google's bread and butter revenue stream comes more from outside the US than within. During their Q2 2008 earnings call, Google said 52 percent of revenue for that quarter, $2.8 billion, came from international business.

Although Google reported total revenue of $5.37 billion for Q2 2008, earnings missed Wall Street estimates, with the usual punishment coming as investors fled in after hours trading. Shares dropped almost 8 percent after market close, making the need for international growth all the more important.