A new leader in the registration and hosting market will emerge in Russia.

Two of Russia's largest companies are in merger talks. This will create a new leader in the Russian market for domain registration and hosting services.

Hosting provider Masterhost and registrar Reg.ru are negotiating a merger.

Analysts estimate the companies' combined turnover in 2012 to exceed 1 billion rubles. If the merger goes through, a new company will be created, the shares of which will be transferred to the current shareholders of Reg.ru and Masterhost. The transaction will be completed subject to approval by the companies' shareholders at the relevant meetings, which will be held in early September.

Experts are confident that if the merger occurs, the single company will become the market leader in domain registration and hosting in Russia, controlling more than 30% of the Russian market.

Domain Name Registrar Reg.Ru is the second largest domain registrar in Russia, and Masterhost is the largest hosting provider in Russia.

Merging registrars and hosting providers has become a trend. Earlier this year, RBC Holding announced the acquisition of Ru-Center, the largest domain name registrar. This company will become part of the Hosting Community group of companies, which will also provide both hosting and domain registration services.

The merger of Masterhost and Reg.ru will create a competitor to the merged Hosting Community.