VKontakte Completely Taken Over by Kremlin-Friendly Usmanov

A media company owned by Kremlin-friendly oligarch Alisher Usmanov has paid $1.5 billion to gain full control of one of Russia's most popular social media websites, VKontakte.

Mail.Ru, owned by Usmanov, said in a statement on Tuesday that with its purchase of a 48 percent stake, it now owns all the shares in the company. Mail.Ru first invested in VKontakte in 2007 and since then has spent over $2.1 billion accumulating stock.

VKontakte is Russia's second-most visited website, after the search engine Yandex, and has over 270 million accounts.

By closing the deal, Mail.Ru, VKontakte's founder Pavel Durov and his former business partners agreed to drop pending lawsuits against each other.

Back in March, Mail.Ru said it had increased its stake in VKontakte to around 52 percent by buying 12 percent of VKontakte (VK) shares from Megafon Chief Executive Officer Ivan Tavrin.

Mail.Ru already owns Russia's No. 2 and 3 social networking sites - Odnoklassniki (OK) and Moi Mir (My World) - and the deal for a further stake in VK gives it effective control over the top three social media in Russia.

VKontakte was founded in 2006 by philosophy student Pavel Durov, now 29, shortly after he graduated from Saint Petersburg University and his meteoric rise almost mirrored that of Zuckerberg, also 29.

By early 2007, it already had one million users and the network and Durov became symbols of the explosive changes brought by the late, but swift, spread of Internet use in Russia.

VK became the platform in Russia for networking with friends, following celebrities or even organising political protests such as the rallies that rocked Russia in 2011-2012 and then the protests in Ukraine in the last year.

Written with agency inputs.