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8 Oct, 2007 06:12

Murdoch mulling sale of News Outdoor advertising?

Media tycoon Rupert Murdoch may be close to selling his News Outdoor advertising group – the largest in Russia. It is said the reason behind the deal could be a new regulation aimed at preventing a monopoly in the advertising market.

In the past few years, Rupert Murdoch’s News Outdoor Group has become the largest operator in a market dominated by about ten major players. However, regulators see a monopoly – or rather oligopoly.

Headquartered in Moscow, News Outdoor Group operates in more than a dozen countries, across 13 time zones. The company has more than 34,000 advertising sites, or “faces,” in 86 Russian cities.

The company pairs international and local expertise, using in-house teams and third-party contractors to make, install and maintain displays that cater to a wide array of clients.

Outdoor advertising has become part of cityscapes. Innovative billboard ads catch the eye of potential customers, and companies have come to understand the great potential of growing disposable income and the emerging Russian market.

“The Russian advertising industry was worth about $US 6 billion last year and growth rate is about 30 to 35% every year,” comments Andrey Bogdanov, senior analyst from the Moscow-based Troika Dialog asset management company.

While that makes outdoor advertising an attractive business, new regulations present a challenge. Operators must now bid for ad space at auction, and each company is limited to no more than 30% of the market, which is likely to open opportunities for smaller firms interested in offering promotional space – very much in demand by companies looking to promote their goods and services.