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.
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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:
Written on August 29, 2008 – 5:11 pm
Ernst-Jan Pfauth, editor in chief
Russia’s largest Internet portal Mail.ru has acquired a 30% stake in its online dating partner Mamba, Quintura reports. They had to pay $15 million for a chunk of the enormous dating service - which offers dating platforms to several big Russian Internet parties.
Mamba has an user base of 10 million people. 1.5 to 2 million of them are looking for the love of their life (or a one night stand) on a daily basis. Together with Loveplanet (which is a destination site), Mamba holds 90 percent of the Russian $21 million dating market.
Not surprisingly, Mamba’s financial numbers are also impressive. The company reported revenues of $9.2 million in the first half of 2008, which meant a 68% percent increase from the first half of 2007.
Mail.ru had to pay the 15 million dollars to Finam, a Moscow-based investment and financial services group that acquired a controlling stake in Mamba in October 2005. It’s their third hit this year, as they recently also sold their stakes in Begun (to Google) and computer game publisher Buka.
There’s interesting twist to this deal
The people at Rambler HQ - that other big Russian web portal - won’t be amused by Mail.ru’s move. Rambler’s dating section uses Mamba’s platform, and accounts for 25 percent of Mamba’s usage. How will they feel about a competitor buying a rather large stake in the same service provider?
If Rambler decides to move its dating section to another platform, the revenue of Mamba could decline by 25 percent. Then Mail.ru will temporarily become a victim of its own deal.
Written on August 27, 2008 – 12:13 pm
Ernst-Jan Pfauth, editor in chief
Russia has the fastest growing Internet population in Europe, research by ComScore shows. The study about the online behavior of European Internet audiences (based on data from the comScore World Metrix audience measurement service) learns us that the Russian Internet population has grown with 27 percent past year up to 17.5 million visitors.
The total number of European Internet users grew with 8 percent during the past year to 241.8 million visitors in June 2008. Next to Russia, countries like France (up 21 percent to 31.5 million visitors), Spain (up 15 percent to 16.2 million visitors), and Ireland (up 15 percent to 1.6 million visitors) also see the Internet becoming a more important part of their society.
See all the interesting stats in the press release. Here are some more highlights:
- Internet adoption was highest in the Netherlands, where 82 percent of the country’s total population age 15 and older went online in June.
- U.K. Internet users spent the greatest amount of time online, averaging 28.5 hours per user per month, while German Internet users recorded the most page views, averaging 2,906 pages per visitor.
Oh Russia
I could fill this blog with exciting news from Russia. Whether it concerns search giant Yandex, the iPhone launch, or dodgy oligarchs buying web stocks, the country’s Internet industry never ceases to amaze me.
What makes the country extra interesting, are the contradictions. While Russia has the fastest-growing Internet audience in Europe, it ranked near the bottom in terms of penetration and page views. Two conclusions can be drawn here: Russia still has a long way to go before they’ve bridged the digital divide and the Russian Internet market will become incredibly important when it has reached its full potential.
Written on August 25, 2008 – 12:12 pm
Ernst-Jan Pfauth, editor in chief
Yandex has changed its Roman character logo into one depicting the company name in Cyrillic. According to Yakov from Quintura, this means Yandex has become a househould name in Russia. The new logo, by design consultancy Art. Lebedev Studio must stimulate the rise of Yandex’s brand, which is on its way to becoming one of Russia’s best-known brands.
Yandex CEO Arkady Volozh
“Our technology is better suited for the Russian market,” Volozh told The Sunday Times. “We have brilliant mathematicians and programmers. We are very strong on data analysis and have developed better technology, which is cutting-edge in Russia. We are constantly inventing new programs to stay ahead.”
So there’s no world-domination tour coming up for Yandex. But why would they? Operating in one of the world’s most exciting Internet markets, the engine is attracting 8 million people per day to its site and holds a share of 55 percent. That’s the bases of their success story: the victory over Google, which only holds 21 percent of the Russian search market. Yes, Yandex is booming. CEO Arkady Volozh knows this, as he told The Times in an interesting interview that “in two years since Google opened an office in Russia we haven’t lost a single specialist to our competitors because Yandex is one of the best companies to work for in Russia.”
The Sunday Times article by Mark Franchetti proves an interesting insight in the career of Volozh, a mathematician who was 24 years old when he first saw a personal computer. Touchy subjects like goverment-supported oligarchs aren’t discussed though. Volozh only says he’s not considering a sale.
Written on August 4, 2008 – 12:16 pm
Ernst-Jan Pfauth, editor in chief
There’s a new loner in the wild west of Russian search engine land, where millions of dollars are spent and Google is just small potatoes. Alisher Usmanov is his name. This man is the founder of Metalloinvest (mining company, €3.3 billion a year) and owner of publishing house Kommersant. As a true media visionary, he has decided to invest in the Russian Internet industry. And when a business man like him enters a market, you know he’s gonna do it with a bang.
What about an acquisition of a 10%-20% stake in Russia leading and Europe’s no. 3 search engine Yandex ($167 million in 2007)? Usmanov wants to buy them from the founding fathers of Yandex as well as via the shares at the upcoming IPO on NASDAQ. To give you an idea about the importance of these negotiations, the IPO was valued up to $5 billion. That means the stake could be worth a staggering $1 billion.
The Quintura blog offers some more background info on Alisher Usmanov’s Internet adventure. Usmanov might be encouraged by the Russian government to get a grip on this booming Internet industry, like he was when he bought the newspaper Kommersant.
Written on July 18, 2008 – 10:00 pm
Ernst-Jan Pfauth, editor in chief
A few weeks ago I wrote a sarcastic article about Google’s efforts to gain popularity in Russia. Native search engines like Yandex and Rambler dominate this market, and Google obviously has been feeling threatened by that. So in the first week of June, the search giant started a billboard campaign in Moscow. This move looked like it was made out of desperation. Today Google made a more serious effort by acquiring Russian contextual advertising service Begun for 140 million dollars from Rambler. 
Probably to conquer some market share - as it grants them access to 40,000 advertisers and 143,000 partner sites - but could there be a second - more important - reason? Maybe this acquisition has something to do with Project Spaghetti - Google’s plan to generate more advertising revenue from YouTube.
Begun introduced contextual video advertising just last month
As I reported on June 30th, Begun integrated contextual advertising for video content on Rambler’s video sharing community, Rambler Vision. From that day on, 1.3 million visitors per month (and counting) would see the ads. Advertisments are based on the tags and are sold on a CPC bases.
This ad-introducing experience might come in handy when Google integrates video advertisement on YouTube.
YouTube only generates $200 million a year
Because YouTube badly needs a advertising strategy. Last week, the Wall Street Journal got two anonymous sources talking about YouTube’s failing advertisement strategy. The video giant generates 10 billion video views a day, but ‘only’ manages to make $200 million a year from advertising. Thus the Google-owned company might introduce pre and post-roll ads, said the sources to WSJ.
Welcome to the Valley, now let’s make money
You see the connection? Not only will Google gain more popularity in Russia, it has also acquired a company that knows how to make money from ads. Google will gladly welcome these fellas in Silicon Valley to turn YouTube in a profitable business.
Written on June 7, 2008 – 10:03 pm
Ernst-Jan Pfauth, editor in chief
We’ve recently reported that the Russian search market is dominated by native search engines like Yandex. This leading service was recently valuated at $5 billion and is preparing for an IPO on Nasdaq this autumn. That must have scared Google, as they’ve launched an outdoor campaign called “Moscow 2.0″ - “Know more on Google.ru“.
According to industry analysts, Google has invested $0.5 million in this traditional way of advertising - which comes down to $250,000 per month. That has bought them 550,000 ad places all over Moscow - reports Quintura -, which Google has covered with 24 billboards, 58 benches and 450,000 thousand stickers. Where’s the 2.0 part, you might wonder. Well, Russian can embed their city snap shots and videos in Google Maps. How does that feel, Yandex? Already frightened?
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