Archive of TheNextWeb.org
Written on November 7, 2008 – 11:59 am
Ernst-Jan Pfauth, editor in chief
Rambler Media, mother company of popular Russian portal Rambler.ru, faces tough times. Their share of web searches has dropped from 15 percent in January to 8 percent now. To make things even worse, Rambler thought to receive $70.1 million in cash from Google for Begun - Rambler’s contextual advertising company - yet the Russian Federal Anti-Monopoly Service refused Google’s application. Rumor has it that a man called Putin inspired the service.
As a result, Rambler Media has to lay-off fifty percent of its staff, Quintura reports. Sources say that divisions responsible for Rambler’s company non-core products will be hit hardest. Examples are telecom provider Rambler Telecom, photo sharing community Rambler-Foto, video sharing community Rambler Vision, and IT news site Ferra.
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Written on November 2, 2008 – 12:14 pm
Ernst-Jan Pfauth, editor in chief
Leading Russian social network Odnoklassniki.ru has recently welcomed Mr. Monetization Nikita Sherman as their new CEO. The man owes his reputation to his work at online dating platform Mamba.ru. He managed to turn that site into a very profitable one by launching several premium services. The result? Less than 15 percent of Mamba’s revenues came from online advertising. The users paid for dating, not the advertisers.
Nikita Sherman
Not surprisingly, the first thing Sherman did at Odnoklassniki’s, was introducing payment options. Quintura reports that if one of the 22 million registered members wants to use his account actively - meaning he’ll be able to send messages or browse to profiles -, he’ll have to pay about $1.3 via a SMS message.
The spam excuse
Of the 22 million users, six million members log in on a daily basis. A fairly large share of the other 16 million users consists of spammers who capitalize on high site usage once they’re active. So Sherman blamed these spammers for the $1.3 activation costs. My guess is that the average spammer is willing to make this investment.
Become invisible, pay four dollars
Anyhow, Sherman’s payment creativity goes further than just the activation costs. He also installed premium services like becoming ‘invisible’ and being able to upload more than a hundred photos. Prices vary between four and five dollars.
Revenue will skyrocket
Without a doubt, Odnoklassniki.ru’s revenue will skyrocket. Like I said, six million people log in every day. If the service is so important to them, they’re willing to pay as much as 15 dollars for the full Odnoklassniki experience. Imagine only a quarter of these six million Russians did that, it would still mean a $22.5 million boost.
Written on October 29, 2008 – 2:12 pm
Ernst-Jan Pfauth, editor in chief
In an upcoming Internet market like Russia, it pays of to choose for the infamous European copy-cat approach (once invented by the Samwer brothers, had Freundefeed as the absolute peak). Yakov from Quintura reports that a Russian Vente-privee.com rip-off has raised a multi-million dollars round of funding from Mangrove Capital Partners and ABRT Fund.
KupiVIP.ru copied the shopping club idea of Vente-privee.com, : which has proven to be a success in several European markets. According to Wikipedia, the French company has around 5.7 million members. Award-winning eCommerce man, Founder and CEO Jacques-Antoine Granjon, employs 750 people and probably welcomed 2007’s year report with a smile (€0.5 billion turnover).
“What’s this unique shopping concept?”, I hear you ask. For starters, it’s an invite only store. If you want to join Vente-privee.com and KupiVIP.ru, you’ll have to ask an existing member for an invite. As soon as you’re among the club of happy spenders, a world of designer brand sales opens up for you. From grand cru wines to a Hermes bag, you can get it for a bargain.
So yes, consider it to be a safe choice for Russian industrial investment group Arlan to bring this unique shopping concept to a country which has fallen in love with consuming. The first round of funding is just the beginning.
Written on October 28, 2008 – 12:01 pm
Ernst-Jan Pfauth, editor in chief
Jason Calacanis predicted in his last night’s newsletter that online advertising spending would go up. After a rather depressing forecast, which included terms like “the Death Spiral of the American Economy” and “The Group Belt Tightening”, Calacanis comes up with the good news. This consists of four parts. Firstly, experience becomes more important than expenses. Good news for Digg, StumbleUpon, and other discovery services. Moreover, there’s no competition (2) for bootstrapping start-ups (3). Lastly, a measurable advertising boom will occur:
Advertisers will start cutting print, outdoor, TV, and radio (probably in that order) in favor of the internet’s action-based offerings such as CPA (cost per acquisition), CPL (cost per lead), and CPC (cost per click).
Jason Calacanis
Although Calacanis is talking about the US, his prediction can be projected on different parts of the world. It won’t be surprising to see it happen in Europe as well - as it makes sense to cut marketing costs and look for attractive alternatives. In Russia this trend is already visible.
Online advertising boom in Russia
Sfnblog reports that online marketing communications in Russia have experienced a surge in financial backing since the beginning of this year. Total marketing numbers for 2008 will average between $1.04 billion and $1.48 billion, says market analysis firm Tagline at the annual Russian Internet Week. They based their findings on a study of 600 companies.
In the UK they’re still waiting
However, in others parts of Europe, the online marketing industry has been noticing a decline in advertising spending. Patrick Smith from Paidcontent UK reports:
IPA’s recent Bellwether report showed that online ad spend in Britain was flat in Q308 and Enders cut its 2008 forecast from £3.56 billion [€4.44 billion] to £3.33 billion [€4.16 billion], despite most in the industry predicting – or at least hoping – that online ad spend would weather a downturn and continue to grow.
Of course I hope we can look back in a few months and say Calacanis was right - that most online markets did follow the Russian pattern. It would further professionalize the blogosphere, including this blog.
Written on October 23, 2008 – 7:38 pm
Mircea Goia, Next Web US Webtipr
Not everybody likes Google, although many of them uses it.
It seems some high power people in Russia don’t like Google either. At least, they don’t like how Google tries to enter in each and every regional market.
This time Google tried to buy the contextul advertising firm Begun (a subsidiary of Rambler.ru search engine and the second biggest player in the russian contextual advertising field). The russian search engine (among the top three in the country) agreed to sell its division to Google for a reported $140 million.
But the authorities (Federal Antimonopoly Service - FAS) said that Kokuna Holdings Limited (owned by Google) failed to provide all the documentation needed to close the deal.
The chief of the FAS Igor Artemyev told Vedomosti, that “Google has not provided accurate and adequate information about the structure of ownership and therefore was refused“.
A source close to shareholders Rambler told Vedomosti that Prime Minister Vladimir Putin was not pleased by Google taking over the local market as it did in other markets.
It’s not that hard to believe this rumour considering Mr. Putin’s past actions.
Written on October 12, 2008 – 12:50 pm
Ernst-Jan Pfauth, editor in chief
After Russian investment group Finam spread rumors of a delayed Yandex IPO last September, it now appears to be definite. According to business daily Kommersant, several investment bankers have said that the Yandex shareholders decided to postpone the $2 billion IPO - which was planned for fall 2008.
After Finam told the press its market expectation was that the IPO would be delayed due to the unstable political situation in Russia, Yandex didn’t confirm this. So the general opinion remained that the IPO was still on track. Yet after the recent credit crunch, it isn’t too surprising that the shareholders aren’t fond of an IPO.
The private equity investors Internet Search Investments and Baring Vostok Capital Partners own 35% stake in Yandex. Tiger Technologies owns the other 15% stake in the company.
Hat tip, as always when it comes to Russian news, Yakov Sadchikov from Quintura (read about his secret here).
Written on October 10, 2008 – 7:28 pm
Mircea Goia, Next Web US Webtipr
Things are heating up in mother Russia!
No, please don’t panic. It’s not “that” kind of revolution which is taking place there now.
It’s another kind, a revolution which took the world by storm in the last decade and still continues today. Some countries entered in this revolution earlier, some later.
But the later ones sometimes are leading the pack and one of them is…yes, Russia!
Comscore released a study at in which states that Russia has the fastest growing Internet population from Europe. It grew by 27% in June, 2008 comparing with June, 2007 (over 17 million). The second place is taken by France (21%) and Spain (15%).
However, a local research foundation called Public Opinion Foundation shows that the total Internet users are around 32 million (spring 2008). An English version of that page is here: http://bd.english.fom.ru/report/map/projects/ocherk/eint0702 (although it’s not updated with 2008 data yet).
At a population of over 141 million people that means that about 12% of that population goes online (about 22% according to Public Opinion Foundation). That’s the entire Romanian population and then some (for POF numbers).
Everything has to be scalable
Now, you know Russia is the largest country in the world when it comes to its territory. That puts pressure on its infrastructure, including IT infrastructure. Everything has to be big and more scalable.
NGENIX (use Google Translate for the English version) is the first Russian Content Delivery Network (CDN) to address the huge local market, according to Quintura blog.
NGENIX potential customers include media publishers, multimedia content providers and software distributors. So far, it opened points of presence in Moscow (their headquarters), Saint-Petersburg, Rostov-on-Don, Samara, Yekaterinburg, Novosibirsk and Vladivostok (see map).
They use UNIX-based solutions, Juniper M series routers and Gigabit switches Cisco Catalyst switches hardware. There’s no list of customers but since it just launched that’s understandable. Having a large territory and good Internet growth rate I’m assuming that more regional content delivery networks will enter the Russian market pretty soon.
Written on September 23, 2008 – 3:00 pm
Ernst-Jan Pfauth, editor in chief
Russian business daily Kommersant reports that oligarch Alexander Mamut’s investment company ANN acquired the largest mobile phone retailer in Russia, Euroset. At first hand, this doesn’t seem to be a web-related topic, yet I decided to report about it as it symbolizes the growing influence of oligarchs on the Russian tech scene. Mamut, who owns a significant stake in LiveJournal-owner SUP, is well-known as a Kremlin loyalist.
Alexander Mamut
The deal valued Euroset at an enterprise value of $1,25 billion including $850 million in debts, Kommersant said.
Here come the oligarchs
In the beginning of August, Alisher Usmanov announced that he wanted to buy a 20 percent stake in Russian search giant Yandex. This man is the founder of Metalloinvest (mining company, €3.3 billion a year) and owner of publishing house Kommersant.
Gentlemen like these two keep buying stakes in Internet and tech companies. Many critics fear that at some point, these oligarchs might partner up with Putin to secure the government’s control on this booming and important industry. During the announcements of the LiveJournal and Kommersant acquisitions, storms of protest arose. All without any consequences.
I hope these critics are mistaking, but I’m afraid that in a few years, we have to admit they had been right all along.
Written on September 4, 2008 – 9:23 am
Ernst-Jan Pfauth, editor in chief
The day before yesterday, rumors spread around the web about this year’s biggest tech IPO. Russian search engine Yandex wouldn’t want to go to NASDAQ this year, due to the unstable political situation in Russia. During a press conference, Russia’s most important investor sort of canceled the deal. As it turns out, it was a nice piece of wishful thinking. The Yandex IPO plan is still on track.
The Russian Internet insider news site Roem.ru reported that Finam just announced its market expectation. It wasn’t official information from Yandex. I guess things got messed up because of language barriers, and Profy got the wrong information. The high numbers mentioned in the post, an IPO of around 3 to 5 billion dollars aren’t correct either. We’re still talking about a $2 billion IPO on NASDAQ in fall 2008.
Written on September 2, 2008 – 10:20 am
Ernst-Jan Pfauth, editor in chief
With the upcoming $1.5 billion to $2 billion IPO of Yandex, certainly the biggest tech IPO we would have seen in a while, the Russian search giant got a fair amount of attention lately. The Times published an (somewhat boring) interview with the founder, the blogosphere commented en masse on this story.
Some bloggers wondered whether Yandex would really consider to enter the stock market this fall, given the Russian-Georgian conflict. Would investors be willing to put their money where the war is? Turns out they probably don’t, because Yandex won’t take the bet this fall. 2009 will be the year of the IPO.
Profy notes this has allegedly been announced during a press conference, organized by one of the leading Russian investment funds - which is known for its multiple investments in IT companies. The valuation has become higher though, as it now circles around 3 to 5 billion dollars.
Meanwhile, Quintura reports about a funny follow up on Google’s act of desperation on the streets of Moscow. World’s largest search company spent half a million dollars earlier this year on billboards. Yandex now has its own version, called “Any Questions?”. Cool detail, users can create their own billboards. Here’s my try:
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