Google: closure further impoverishes Russian technology, not the alphabet
First capture the airwaves. The old textbook, used during countless coups in Asia and Africa, is back in vogue. Hong Kong authorities have frozen assets and arrested top Apple Daily journalists, gossip of the pro-democracy newspaper, leading to her death. Now the Russian authorities have captured and committed a raid Google’s internal bank account, bankrupting its subsidiary in the country.
Bad news for citizens, but investors do not need to sweat. Google has already closed “the vast majority”Of its commercial activities in the country. Foreign customers probably pulled the advertisement anyway. There will be no significant impact on the results of the first quarter.
This is not a Google outlet on a China scale. A search engine was banned there more than a decade ago, but Google still makes a lot of money by selling ads abroad to Chinese companies. It also does not entail the write-off of funds exposed to companies with large assets, such as oil supermajor BP ($ 24 billion) or carmaker Renault (2.2 billion euros).
Any income lost by the parent alphabet will be small. About 1 percent of Google’s revenue comes from Russia, mostly from advertising. The devastated piggy bank in the Russian subsidiary was, in effect, working capital in local currency, not billions of dollars. This may not be enough even to cover outstanding fines levied for alleged crimes, such as abandoning a YouTube channel run by a sanctioned oligarch and distributing content criticizing the Russian government.
Google will maintain its presence – YouTube, app store and other free services will continue to be available in Russia – without obvious damage to its reputation. YouTube may continue to provide independent content in competition with predominantly pro-Putin Russian media.
Technical companies have long enjoyed Russian talent; Google co-founder Sergei Bryn was born there. But frustration with the country as a place of business has grown. Data sovereignty laws and arbitrary blocking of websites drove out bright sparks of technology long before last outcome. The opening of Google will further weaken the technical ecosystem of Russia’s private sector, as well as Russian citizens ’access to independent news.