“Hmm, when I get home tonight I think I’ll write a tongue in cheek post wondering how long it will be before the media condemns the deal, and raises the spectre of evil Russia taking over the tiny, defenceless Iceland.”

I genuinely thought it was going to be a slightly daft post that no-one would take seriously.

Then I read this editorial, published an hour or so ago in British newspaper the Daily Telegraph:

“[The loan would] create strategic ructions. Iceland is a NATO member, but Russia would want something in return for a loan equal to almost a third of the tiny state’s GDP. The US would fret this could eventually mean a Russian military presence in the North Atlantic.”

Sigh.

Update: The Icelandic Weather Report sums up Iceland’s decision to make friends with Russian pretty succinctly:

a] The US pissed off Icelandic authorities two years ago, when they unilaterally pulled their military out of Iceland, with the accompanying job losses and whatnot.* b] The US pissed off Iceland a few weeks ago when they purposely left them out of a currency swap agreement. c] Iceland has gone looking for new friends. d] Russia is Iceland’s new best friend.

A closer relationship between Russia and Iceland certainly looks on the cards, although I still think the chances of a Russian military base in Iceland are pretty slim!

Russia bails out Iceland. Media reacts in horror. is a post from: Siberian Light

Not only did I see big, bold Baltika adverts in each of the free London papers earlier this week, but they’ve taken to advertising on the London Underground:

Baltika beer in Britain is a post from: Siberian Light

A law backed by 341 lawmakers in the 450-seat State Duma lower house of parliament gave Gazprom, and oil pipeline monopoly Transneft, special exemption from strict limits on private businesses wielding arms.

The two state-controlled companies will for the first time be allowed to employ their own armed operatives instead of contracting an outside security firm. Their armed units will also have access to more weapons and more freedom to use them than private security companies.

The stated reason: to ensure the protection of gas pipelines and facilities from militants.

My cynical response: so much for the mighty Russian army.

Anyway, opponents of the bill are warning that today’s move risks opening a pandoras box, as they believe that where Gazprom leads, other Russian companies are sure to follow.

The only silver lining, I suppose, is that the bill still has to pass the Federation Council, and be approved by Putin before it becomes law.

Gazprom's private army is a post from: Siberian Light

The site, Allofmp3.com, was quietly closed as the Kremlin sought to end criticism from the United States that Russia was failing to clamp down on music and video piracy.

However, an alternative site run by the same Moscow company has already emerged. MediaServices says that mp3Sparks.com is legal under Russian law, using many of the same arguments advanced in support of allofmp3.com.

Somehow, I don’t really see this phoenix-from-the-ashes tactic fooling anyone in the record industry…

Anyway, I had a few dollars tucked away on Allofmp3 for a rainy day (I know, foolish when you consider the ongoing uncertainty over its future) so took a quick trip over to see what has changed.

I was amused to see that mp3Sparks.com is an exact replica of allofmp3.com – same catalogue, same basic design, same user IDs, it’s even transferred across every single allofmp3 user’s account!

My account, sadly, wasn’t working properly when I visited, so I’m not quite sure that my money is still mine, but when I emailed the mp3Sparks.com to check whether my password was still valid, a reply came back within minutes, which is a fairly positive sign.

Update 4 July:  In the comments ?????? has pointed out that mp3Sparks has gone the way of its older brother and is, itself, no more.  I guess someone sent the heavies round.

Allofmp3 dies, and is reborn is a post from: Siberian Light

Update, April 2009: After an almost two year break, Mosnews has returned from the dead.

Last month I reported that the Mosnews website was no longer being updated with new stories.

Sadly, it looks as though Mosnews has now finally gone to the great newsroom in the sky, as their website – www.mosnews.com – has been completely closed.

Ladies and Gentlemen, I’d ask you to stand for a moment’s silence, to pay your respects to Mosnews, and to mourn all the bizarre stories we will now never hear about.

Mosnews – RIP is a post from: Siberian Light

The money will go primarily on expanding Ozon’s logistical infrastructure, by allowing them to establish new distribution centres. In a country as big as Russia, you can see why this kind of investment is necessary…

Currently Ozon’s turnover is over $50 million per year, and this is expected to double over the next couple of years. It looks to me like they have pretty similar business model to Amazon.com – most of their income comes from books sales, but they’ve also diversfied into DVDs and electronics.

Apparently Cisco’s move is their first into Russia, but it looks like the Ozon.ru deal is the first of a number they will be striking in Russia and the wider region:

“As any strategic investor we intend to develop the main business of our company. After Russia we intend to move on to Ukraine and Belarus, probably Kazakhstan”.

Read/Write.web has more on the Ozon story, plus the interesting statistic that Russia has the third largest overall number of internet users in Europe. They also have a fascinating roundup of Russian Web 2.0 applications.

Ozon.ru (Russia's Amazon) gets $18m venture capital is a post from: Siberian Light

Aeroflot joined with the largest Italian bank, UniCredit, on Monday to bid for most of the 49 percent stake in Alitalia held by the Italian Finance Ministry, which is selling its shares in hopes that a private owner will have better luck reviving the money-losing airline.

Experts seem to think that it’s a bit too much for Aeroflot to take on just after a major restructuring of its own.

A part of me thinks, if they’ve got the money, they might as well spend it on expansion. But I also wonder whether Aeroflot is following the recent Russian trend of making high profile purchases, with more of an eye for their international image than their long-term profitability.

Aeroflot bid for Italian airline is a post from: Siberian Light

PwC are accused of failing to pay 243 million rubles (about $9.3 million) in back taxes:

Russian tax authorities are accusing PwC’s Moscow branch of deliberately underestimating profit tax on sums it allegedly paid to offshore PricewaterhouseCoopers Resourses B.V., which was supposed to provide financial consultations to clients in Russia. Tax officials said the consultations were provided by the Moscow branch of the company instead.

A separate investigation of PwC is also ongoing. The auditors are suspected of assisting Yukos – for whom PwC were auditors – to cover up “illegal financial schemes” and of drawing up two different audit reports for the now bankrupt energy giant.

The tax service is seeking to invalidate Yukos-PwC contracts for 2002-2004 and to charge $480,000 from PwC. Tax authorities said Yukos failed to correct violations discovered in 2002 in the following two years.

This is an interesting development, not only because it demonstrates once again that Russia is unafraid of taking on even the biggest foreign firms operating in Russia today, but because it may well have the effect of scaring away a major auditor from the Russian market.

Which, in a market that should be crying out for the transparency and respectability that professional audit can bring, is most definitely not a positive development.

[Full disclosure: I have worked for PwC in the past, although was not in any way connected to their Russian operations].

PricewaterhouseCoopers investigated by Russian police is a post from: Siberian Light

Leading the pack was Yandex, a privately held Russian search engine that was visited by 64 percent of Internet users; Mail.ru, an e-mail service, came in second at 56 percent, and Rambler was third at 53 percent.

But even in its share of revenue from ads linked to searches, the lucrative Internet business model pioneered by Google, the company lags. Yandex controls 50 percent of the Russian market for such ads, according to analysts at ING, a Dutch bank. Rambler is second, with 41 percent, and all other companies, including Google, fight over the remaining 9 percent.

The article goes on to suggest that the complexity of the Russian language is holding the internet giant back, but I’m not so sure this is the biggest reason.� Wouldn’t this complexity affect the domestic Russian�search engines�as well?� I prefer their explanations about the ability of Russian companies to adapt to the economics of the Russian market, and the difficulties Russians face paying for goods over the internet.

Also tucked away is some good news about the freedom of the internet in Russia, compared to countries like China.� There’s no difficulty in getting hold of news about polonium, for example.

Google struggles in Russian internet market is a post from: Siberian Light

Putin, able to see matters rather straighter than Yeltsin, realised two crucial things about the oligarchs: that they were potentially more powerful than him, and that they were about as popular with your average Russian as a man idly burning bundles of £50s outside an orphanage (according to one 2004 poll, only 18% of Russians opposed wholesale renationalisation of the country’s resources). In a country in which anti-semitism never quite went out of fashion, the fact that many of the oligarchs are Jewish makes them an even more tempting target for a populist like Putin (after the arrest of arch-oligarch Mikhail Khodorkovsky, Putin’s already high approval rating was measured at 80%).

I doubt it’ll reveal anything particularly startling, but it should be a quite interesting way to while away hour or so.

Russia's Godfathers is a post from: Siberian Light