Internet Marketing and Social Media Consultants

While Google is getting accustomed to being beaten in the search engine battles raging in China and Korea, Russia is proving to be a difficult market as well.

Russia’s biggest search engine is Yandex, and while Google is increasing its share at a rapid rate of speed, Yandex currently holds 44% of the market share in Russia, which is more than ten points ahead of Google. Yandex also has some share in other European countries like the Ukraine, making it the second biggest search engine on the continent.

Yandex is also going public on the NASDAQ at the end of this year, with the company valued at around $5 billion, which would make it the biggest tech offering in Russian history. The offering could raise them up to $2 billion in capital.

There are big advantages for the home team when it comes to search, as we have seen in China and Korea. Certain Russian language inflection that doesn’t register with the likes of Google is better handled with Yandex.

Much of the excitement for Yandex’s offering comes from the explosive growth in broadband access in Russia. Currently, only ten percent of the country is broadband ready, but many of the smaller towns and communities are coming online in the next few years, tripling availability. A domestic search engine with Russian sensibilities will likely thrive with a new generation coming online. Search engine marketing in Russia will become more integral as well.

However, revenues, mostly from ad sales, were only $167 million in 2007. While their profits have doubled every year since 2000, Yandex will be looking to do better an influx of capital and such a massive potential user base coming online. New services such as Yandex Money, which allows customers to buy coded scratch-off cards at kiosks that can be used to pay for online items (thus avoiding the use of personal financial information) is proving popular, and Yandex recently purchased MoiKrug, a Russian social networking site.

Story via Spiegel Online

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