Google Not Embraced in Booming Russia
Though Google is a search and advertising behemoth stateside, it has had its share of problems mimicking this dominance overseas, and Sergey Brin’s own motherland, Russia, is no exception.
According to ComScore Networks, about 28% of all Russian Web traffic from users’ offices or homes led to Google online properties in October. This makes Google just number eight in terms of online traffic in Russia, a far cry from its ubiquitous popularity in the U.S. and Western European countries.
Yandex, a homegrown search engine in Russia, took in a leading 64% of Internet users, while e-mail service provider Mail.ru garnered 56% to place second for October. Rambler, a Russian online portal, was third with 53% of all Russian traffic.
Not only is its bite a whole lot smaller in Russia, but apparently Google’s bark is also quieter and a lot less intimidating.
“Google promised they would destroy everything, but look at where they are. They are not that big,” said Irina Gofman, chief executive at Rambler Media.
To rub salt in this humbling wound, Google also lacks the advertising prowess and domination that it has in the U.S. Search-related advertising is dominated by Yandex, which has a hold of 50% of the total market, while Rambler comes in at second with 41% of the market, according to Dutch bank ING. Google and the rest of the pack in Russia must fight over the remaining 9% of the pie.
Dominance in the Russian search ad market will mean a lot very soon. Online ad spending is expected to jump from $110 million last year to about $1 billion in 2012.
So, what’s the reason for Google’s difficulty in garnering the affections of Russian Internet users? Apparently, it might be a poor grasp of the Russian language.
Kannan Pashupathy, the head of international engineering at Google, admitted that the company’s “understanding of Russian was not as good as we wanted it to be.”
Another weakness could be Google’s lack of a strong handle of the subtleties of the Russian market’s culture. Gofman indicates that payments for online ads are often made at traditional banks because so many small businesses do not have credit cards or online-payment resources, a practice far from common in the U.S.
Still, Google has made promising strides in Russia. Russian research firm Comcon indicates that the share of online users who visit Google’s sites has doubled since the end of 2003.
Russia is seeing a boom in Internet growth, with a 35% increase in the number of computers in the country, and about 25 million people surfing the Web. This translates to 17% of the entire Russian population experiencing the Internet.
Presently, 21,500 Russian schools have access to the Internet, and 52,940 schools are expected to be connected by the end of 2007.
Google seems to have their work cut out for them if they have any hopes of cashing in on Russia’s big potential.
Sources:
http://news.com.com/New+to+Russia,+Google+struggles+to+find+
its+footing/2100-1038_3-6144420.html
http://www.itar-tass.com/eng/level2.html?NewsID=11093194&
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