Yandex Archive

Yakov at Quintura has a post today discussing the state of the Russian online advertising market. That data comes from Russian media site MindShare Interaction. Yakov notes, "the Russian contextual advertising accounted for 8.9 billion rubles ($357 million) or 60 percent of total online advertising spending, while display advertising accounted for 5.8 billion rubles ($233 million) or 40 percent of the total spending."

The top categories were: automobile manufacturers, consumer goods, industrial equipment manufacturers and home appliance manufacturers. The list seems similar to that of the U.S.

Russian search provider Yandex controls over 70% of the contextual advertising market in Russia. For reference, Google controls 8% of the contextual ad market.

Check out our in-depth interview with Yandex CTO Ilya Segalovich. Yandex was also rated one of the top 10 Web sites in Russia by GOAL.

Quintura is reporting that the founder of Metalloinvest holding and owner of Kommersant publishing house, Alisher Usmanov is seeking a 10-20% stake in Russian search engine Yandex. Based on the current valuation for Yandex of $5 billion, this puts Usmanov’s stake at up to $1 billion.

Usmanov and his companies have minority stakes in the holding companies for mail.ru and Live Journal. This type of deal could put Usmanov into a strong position with the largest Russian mail provider and the largest Russian search engine. In case you were wondering, Yandex currently has 54% market share in Russian search while Google is at 19%.

Check out our exclusive interview with Yandex CTO Ilya Segalovich to learn more about the largest search engine in Russia.

Russian leader in search Yandex has announced plans to acquire SMIlink, a provider of traffic services. Yakov over at Quintura has the details on the acquisition. Note that SMIlink’s traffic services are not Web traffic-based but rather actual traffic out in the streets of Russia.

Financial terms of the deal were not disclosed. SMIlink has a staff of about 70.

Check out our in-depth interview with Yandex CTO Ilya Segalovich. Yandex was also rated one of the top 10 Web sites in Russia by GOAL.

Russian consulting firm GOAL is out today with a new report that shows the top Web sites in Russia. The report is a great read if you are interested in learning more about Russia and its Web economy. There’s also a discussion of international players in Russia which includes Google, YouTube, LiveJournal, RapidShare and Yahoo.

The report includes the following categories: Social networks, blogs, photos, videos, news, dating, Q&A, bookmarking, music, citations, search engines and RSS, file storage, wish lists and start pages.

There’s only one issue with the report. They used Alexa as their sole basis of measurement to rank the sites. While that basically makes the actual numbers very suspect, I’d still recommend reading the site for the information provided about each site.  You can download the entire report here (it’s free).

Here are their Top 10 Russian Web Sites (remember that the list is generated by Alexa rankings):

Vkontakte.ru – a successful clone of Facebook. Vkontakte is the most visited site in Russia. It has over 13 million registered users.

Mail.ru is Russia’s leading mail portal, which has grown to include many other social networking features.

Yandex.ru is Russia’s leading search engine, with additional services including email, news etc. The search engine is optimised for the morphology of Russian language.

Odnoklassniki.ru has been sweeping Russia by storm. It is a simple tool to find schoolmates. Odnoklassniki is the fourth most visited site and has 18 million registered users.

Rambler.ru is another very successful search engine. It offers services such as photo and video sharing, dating and games. It owns Russia’s most popular messenger / VoIP phone system ICQ.

LiveInternet.ru is Russia’s leading website of personal blogs, but in reality it combines various online services including web mail, dating and file sharing.

LiveJournal.ru, the US blogging site, has become a phenomenon in Russia, forming the most lively uncensored information portal. From journalists and government critics to pop singers and comedians, many well known personalities share their views on current events.

Loveplanet.ru is Russia’s leading dating website, which claims to have 11 million registered users.

Smotri.ru is Russian analog of YouTube, and despite rated by Alexa at the place number 36, has shown the highest level of visits amongst the independent video sharing sites with the exception of YouTube itself.

Diary.ru is a blogging site, which allows its users to form communities.

Yakov at Quintura has a post today discussing Russian search engine Yandex and their expansion outside of the Russian language. Currently Yandex returns 90% Russian domain results (.ru) and 10% other results which include the .com domain. Yakov also notes that 15% of its searches are in a language other than Russian and that Yandex could capture that revenue by allowing more non-Russian searches to take place.

I am wondering if we will see local search engines outside the U.S. enter the U.S. market by going after the U.S. markets where a specific language is spoken. For example, in parts of Brooklyn, Russian is the most popular language. Should Yandex market to this demographic? What about Spanish? Or French, German, Japanese, etc.

While this would be a niche market to target, it could broaden the take rate for these search engines which operate outside the U.S. And these marketing opportunities could push past just search into mail, video, news, etc. Check out my exclusive interview with Yandex CTO Ilya Segalovich for more information about how Yandex works and their business model.

Today I had the opportunity to meet the CTO of Russian search engine Yandex, Ilya Segalovich. Of the 100+ interviews I’ve conducted for CN, this was one of my favorites – mostly learning about the differences between the U.S. and Russia in views on technology. It’s hard to call Yandex a search engine anymore – they are a leader in many of the Web categories in Russia including mail, search, news, photo hosting, shopping, etc. Here are my notes from our discussion.

Yandex officially launched in 1997 as a way to sell their enterprise search solution. Advertising wasn’t a thought back then, their goal was to sell more search boxes into large companies in Russia. In late 1999, they received a round of funding and became profitable in 2002 and have been profitable since. The company has 1,000 employees, most are located in different cities in Russia and some are in Kiev in the Ukraine. We spoke about employee retention as the Russian Web scene heats up and he noted that they have very high retention rates and one of the reasons is because of their powerful and well respected brand.

Most of the revenue for Yandex comes via their shopping portal which is the number one shopping portal in Russia. In fact, Ilya notes that nearly 100% of all companies in Russia with sales online is working with Yandex. They have a good bit of natural language search inside the shopping portal to help find the right product. They established a country-wide data exchange format for sharing the data. The shopping portal is the area in which Yandex exerts the most effort.

Their news aggregator is also ranked 1st in the country and Ilya explained that the entire news system is run by computer – no human intervention. It’s a "smart" system – which means that while it aggregates the news like TechMeme, it goes a step further to pull out keywords and link them to other articles, includes maps where appropriate, photos, videos, etc.

They also have a maps and traffic system which is number one in the country. Ilya said that getting map data in Russia is nearly impossible and their system is very strong in this area with more data than anyone else, especially in the large cities.

Other services on Yandex include a mail app which is #2 behind leader mail.ru and a photo hosting site they opened last year.

Some tech stats about Yandex:

• 3.5 billion pages in the search index
• He couldn’t tell me the exact number of servers but it’s in the "several thousands"
• 35 million searches a day
• several data centers around Russia
• two-layer architecture
• the database is split in pieces and when a search is requested, it pulls the bits from the different database servers and brings it together for the user
• languages used – c++, perl, some java
• server software – freebsd

Revenue growth for the company (in US$):

• 2003 – 8 million
• 2004 – 18 million
• 2005 – 35 million
• 2006 – 72 million
• 2007 – not public yet

We concluded with a discussion about Google. He showed me a chart of the various engines in Russia and Google’s growth over the past two years has been the strongest of the major players. Google has also opened a bunch of offices in Russia.

Thanks to CN readers Todd and Mr. Crash for their question ideas!

Yandex. Yandex is the leading Russian search engine with a 70% market share to 15-20%. We briefly covered Yandex along with several other international search engines last October.

I am interested in any questions you have for Ilya. Leave them in the comments and I will make sure to address them when I meet with him tomorrow. It’d be great to get more CN readers involved in the interviews we conduct!