Google Russia forced to declare bankruptcy after bank account seizure
Enlarge / The Google doodle for Russia National Day 2016.
Google’s going… out of business?! That’s apparently the case in Russia. As Reuters reports, Google’s Russia subsidiary plans to file for bankruptcy after “the authorities seized its bank account, making it impossible to carry on operations.” Reuters has a statement from Google:
The Russian authorities’ seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations. Google Russia has published a notice of its intention to file for bankruptcy.
A regulatory filing showed Google Russia has been expecting to file for bankruptcy since March 22. The division did $2 billion in revenue last year, but that doesn’t matter much when authorities take your entire bank account.
Unlike many tech companies that have abandoned Russia over its invasion of Ukraine, Google has tried to keep doing business in the country. Heavy hitters like Google Search, YouTube, Maps, Gmail, and Google Play are all still running in Russia. Google’s most important product, the ad platform, was shut down on March 3 in Russia after the Russian government started demanding it censor ads about the war. Over the next few days in March, the big four credit card companies all pulled out of Russia, making normal business transactions very difficult. Google cited this “payment system disruption” as the reason for shutting down Google Play paid apps.
It’s not clear how much of a presence Google will have in Russia going forward. Google has been accused of having a cozy relationship with Russia, and its behavior is an outlier over competitors like Microsoft and Apple, which both voluntarily stopped paid services in the country before the credit card companies pulled out. While Google enjoys a ~90 percent search market share in many countries, Russia is one of the few places it faces a viable search competitor; Google splits the search market nearly 50/50 with local tech company Yandex. That market share might explain why Google doesn’t take a tough stance against Russia—if it gets blocked even temporarily, there might not be a market to come back to.
The Russian government still wants to rely on Google for some services, though. The government said Tuesday it wants to keep YouTube running in the country, saying that a shutdown would harm Russian citizens. Like the rest of the world, there are no video sites on the same scale as YouTube in Russia.