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Google Inc.’s share price up, to close engineering operations in Russia due to new government rules about information storing

According to a person familiar with the situation, who asked not to be named because the matter is still not public, Google Inc. intends to shut its engineering operations in Russia. The companys decision to transfer the operations out of the country is considered to have come, after the implementation of new rules by the government, which require more information about Russian citizens to be stored in data centres in the country.

By this step Google will be able to concentrate on areas like business partnerships, marketing and communications, sales and user support, which is why it intends to keep a bigger group of employees in Russia, regardless of the shutdown of its engineering operations.

The person familiar with the situation revealed that Google plans to expand its business investment in Russia in 2015. Such plans were applied to other countries, including Norway, Sweden and Finland, where similar internal changes were made by the U.S.-based owner of the worlds largest search engine.

An official representative of Google said in a statement, cited by the Wall Street Journal: “We are deeply committed to our Russian users and customers and we have a dedicated team in Russia working to support them.”

Googles spokesman, however, refused to make any comments on the reasons, which urged the company to decide to close its engineering hub in the country. He also abstained from revealing the exact number of the companys employees in Russia.

The government requirement for the company to keep more data locally is a drastic step, which is believed to have been taken in response to the information about an extensive internet surveillance by the U.S. National Security Agency. Nevertheless, Google is still holding on as one of the leading technology companies in Russia, with an increasing search market share, which expanded from 27% in the first fiscal quarter to 31% in the third.

Google Inc. was up 0.77% to close at $532.11 per share yesterday, marking a one-year drop of 1.31%. The company is valued at $362.75 billion. According to CNN Money, the 43 analysts offering 12-month price forecasts for Google Inc. have a median target of $640.00, with a high estimate of $750.00 and a low estimate of $530.00. The median estimate represents a +20.28% increase from the last price of $532.11.

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