Yandex: Owner of ‘Russia’s Google’ Pulls Out of Home Country

Yandex, the Dutch-based parent company often referred to as “Russia’s Google,” has sold its Russian operation to a consortium of investors, making it a fully Russian-owned entity.

Yandex, the tech giant known as “Russia’s Google,” has made a significant move by pulling out of its home country. Its Dutch-based parent company has sold its Russian operation for 475 billion roubles ($5.2bn; £4.2bn), much lower than its estimated market value. This sale marks a shift in ownership, with Yandex’s Russian business now being fully owned by Russian investors. The move comes amidst accusations that the company has been hiding information about the war in Ukraine from the Russian public. While some view this as a strategic move to protect Yandex from potential takeovers by Western IT giants, others see it as a concerning development in the Russian tech landscape.

Yandex’s Rise and Diverse Services

Yandex was established during the dotcom boom in the late 1990s and quickly became a prominent player in the Russian tech industry. It developed its own search engine, mapping, and advertising businesses, offering services similar to those of Google. Additionally, Yandex expanded its portfolio to include services such as taxis and food delivery, becoming a versatile tech company in the Russian market.

The Controversial Sale and Market Value

The recent sale of Yandex’s Russian business for $5.2bn is significantly lower than its estimated market value of nearly $30bn in 2021. This has raised eyebrows among industry experts, as the company’s worth seems to have been undervalued in the deal. The sale to a consortium of investors has left many questioning the motivations behind such a move and the potential consequences for Yandex’s future growth and development.

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Yandex’s Independence from Google

Despite being dubbed “Russia’s Google,” Yandex has no direct affiliation with the US search engine giant or its parent company, Alphabet. This distinction has allowed Yandex to establish itself as a formidable competitor in the Russian market, offering localized services tailored to the needs and preferences of Russian users. However, the comparison to Google highlights Yandex’s dominance in the Russian tech landscape and its importance to the country’s digital ecosystem.

Foreign-Owned Businesses Exiting Russia

Yandex’s decision to pull out of Russia follows a trend of foreign-owned businesses exiting the country, often under unfavorable terms. Since Russia’s invasion of Ukraine, many international companies have faced pressure to sell their assets or have had them seized by the Russian government. This has created an uncertain environment for foreign investors and raised concerns about the state of business and economic relations between Russia and the international community.

Arkady Volozh’s Departure and Sanctions

Yandex’s co-founder, Arkady Volozh, publicly spoke out against Russia’s invasion of Ukraine, making him one of the few top Russia-linked businessmen to do so. In 2022, he left the company, and both Yandex and Volozh faced sanctions from the European Union. The EU accused Yandex of promoting Russian state media and narratives in its search results while suppressing content critical of the Kremlin. Volozh is currently seeking to have the sanctions removed, asserting that he was never close to Russian President Vladimir Putin.

Compliance with Russian Government Demands

To comply with the Russian government’s demands regarding content, Yandex sold some of its online resources to state-controlled rival VK in late 2022. This move can be seen as a strategic decision to align with the government’s agenda and maintain a favorable position in the Russian market. However, it also raises concerns about the company’s independence and the potential impact on freedom of expression and information accessibility in Russia.

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Yandex’s decision to sell its Russian business and become fully Russian-owned marks a significant shift in the country’s tech landscape. While some see it as a strategic move to protect the company from potential takeovers, others view it as a concerning development that could impact the company’s independence and its role in shaping the digital ecosystem in Russia. The undervaluation of Yandex’s market value in the sale raises questions about the motivations behind the deal. Additionally, the company’s compliance with the Russian government’s demands regarding content raises concerns about freedom of expression and information accessibility in the country. As Yandex embarks on this new chapter, the implications for the Russian tech industry and the wider international business community remain to be seen.