1st Apr 2008 07:00
Rambler Media Ltd. ("Rambler" or "the Group"), operating one of Russia's mostpopular internet brands, today announces that it has sold a 51% stake in itsproprietary online display advertising agency ZAO Index20 ("Index20") to asubsidiary of Video International Group ("Video International"), the largestmedia advertising operator in Russia. The sale reinforces Rambler's strategicpartnership agreement with IMHO VI which was announced in October 2007. Underthis sale agreement, Index20 and IMHO VI will generate a minimum of US$40million of cash advertising sales for Rambler from display advertising in 2008. Index20 is an in-house advertising sales agency which was, prior to today,wholly-owned by Rambler and handled all banner (display) advertising salesexclusively for Rambler's web properties including Rambler.ru, Lenta.ru,Price.ru and Rambler ICQ. Video International is the leading media advertising market operator in Russiaand Eastern Europe, providing solutions for mass media advertising on major TVchannels, radio stations, printed media and internet properties in the region.In October 2007, Rambler Media signed a strategic partnership with IMHO VI, asubsidiary of Video International Group, authorizing it to sell advertising onRambler's web properties. Mark Opzoomer, CEO of Rambler Media, commented: "We are very pleased to announcethat we have now sold control of Index20 to Video International, the leadingmedia advertising group in Russia. We believe that by allowing Index20 someindependence from Rambler and partnering with IMHO VI, we will attract moreadvertisers to Rambler and capture a larger share of the online advertisingmarket, thus improving our sell-out and power ratios. In addition, through thisstrategic partnership, IMHO VI will absorb the corporate costs related toIndex20, therefore enhancing Rambler's cost base." Arsen Revazov, the President and founder of IMHO VI, further commented: "Thistransaction will enable Video International, as shareholders of Index20, tofully control the development of its business. We are very excited that thisacquisition creates a basis for synergies between IMHO VI and Index20 and thatit will strengthen Video International's market share in the Russian internetadvertising market. We will implement Video International's corporate standardsand its unique advertising sales technologies to achieve new heights for Ramblerand to better serve its advertisers." Terms of the agreement Under the agreement, Index20 will be controlled by Video International with a51% ownership while Rambler will own the remaining stake and will receive adividend from Index20's profit in proportion to its ownership. The cashconsideration for the sale has not been disclosed. Rambler has a three year calloption for 51% of Index20. The deal is expected to accelerate Index20's growth as a leading digitaladvertising agency in Russia by enhancing its sales capabilities, managementtalent, systems and reach and enabling it to provide new services such asaffiliated programs, search engine marketing services and other digitaladvertising innovations (video, wap/mobile, rich media). In parallel, thestrategic sale is expected to open up access to Rambler's web properties to abroader range of advertisers. Under the agreement, Index20 will generate a minimum of US$40 million worth ofadvertising sales for Rambler in 2008, which will increase to a minimum of US$60million in 2009 and US$90 million in 2010, to beadjusted according to predefined, market-driven targets. The advertising market in Russia is growing very strongly, and internetadvertising is growing twice as fast. Online display advertising was estimatedto have increased by 60% year on year in 2007 to US$160 million (2006, US$100million) (source: 2007 - Video International, 2006 - Russian Association ofCommunication Agencies - AKAR). Index20 will continue to handle all banner advertising sales for Ramblerproperties, in exchange for which Rambler will continue to pay variablecommissions, and will also sell advertising space on other online websites, inclose connection with Video International. The advertising inventory provided byRambler to Index20 does not include the display and context advertising in thesearch results. \* TFor further information, please visit www.ramblermedia.com or contact: Rambler Media Shared Value LimitedMark Opzoomer Nicolas DuperrierTel. +7 495 500 3826 Tel. +44 (0) 20 7321 5010 [email protected] ING Wholesale BankingDaniel Friedman / William MarleTel. +44 (0) 20 7767 1000\* T ABOUT RAMBLER MEDIA Rambler Media is an internet media and services group which operates or hasinterests in leading Russian language internet brands including the originalRussian internet homepage and search engine 'Rambler.ru', on-line newspaper'Lenta.ru', product comparison website 'Price.ru', internet catalogue andnavigation system 'Top 100', instant messaging service 'Rambler-ICQ', digitaladvertising agency 'Index20' and contextual advertising company 'Begun'. RamblerMedia's shares are traded on AIM, the junior market of the London Stock Exchangeunder the symbol 'RMG'. For more information on Rambler Media, visit ourcorporate website at www.ramblermedia.com. Copyright Business Wire 2008Related Shares:
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