Google rules the search market worldwide and clearly dominates in most countries. In a few markets though, it has failed to make too much inroad, especially where the country is being served by a powerful local brand. This is the case in China, where Google is getting trumped by Baidu and has just managed to get to a 30 percent share of the market. Things are even worse in Russia, where Google manages to get just 23 percent. Things are about to change there though, as Mail.ru has announced that Google will be powering its search engine at least for the coming year.
“Mail.Ru and Google signed an agreement on cooperation in the field of search and advertising technologies. Search engine portal Mail.Ru, a member of the three leaders in the Russian market will use Google search technology, from January 2010, as well as displaying search results relevant ads using AdSense. This Mail.Ru plans to actively develop its own search technology,” Mail.ru said in a statement in Russian via Google Translate.
This deal enables Google to secure a better foothold in the Russian market which is dominated by local player Yandex with a 58 percent stake in the search market. Mail.ru, which operates the most popular social network in the country, as well as the most popular web portal, also has about 10 percent of the search market, but it doesn't have its own search technology. At the moment, its search engine is powered by Yandex. With this deal, Google will be getting the equivalent of about a third of the market.
However, Mail.ru's search won't feature any Google branding an unusual step for the Mountain View search giant, but likely a compromise it had to make in order to entice the Russian site owned by DST which also holds a small stake in Facebook. While this decision may hurt Google's pride, the second compromise it had to make will hurt its wallet as Mail.ru will get to keep 60 percent of all advertising revenue served by AdSense on the search engine, apparently a bigger percentage than what it got from Yandex.