Russia's Internet Challenge
Yandex, deemed by some to be the “Russian Google”, recently raised some eyebrows when its chief technology officer, Ilya Segalovich, claimed the IT company was superior to its American counterpart. Segalovich argued that, “Google is a great company, but we are better.”
The CEO of Yandex, Arkady Volozh however sees matters more pragmatically, suggesting that “Russia deserves to have a technology company of a global level”, which can rival or compete with global search-engine heavyweights such as Google, Yahoo or Baidu.
As part of its plans to raise its global profile, Yandex made its debut on the Nasdaq stock exchange on May 27 2011. Within the first day of trading Yandex’s shares surged by 55% closing at $38.84, making it the biggest U.S. internet listing since Google went public in 2004.
Apart from its classical search engine functions, Yandex has emulated several other American success stories such as business networking site LinkedIn (with moikrug.ru: Russian for “my circle”), ebay (with Yandex.Direct), and iTunes (with Yandex.Music) or developed regional specific search engines such as “Poltava”, which takes into account the specific linguistic search engine needs of its Ukrainian users.
Yandex’s Nasdaq success comes at a time of increased interest in Russia’s young and growing IT industry. The small Siberian town of Academgorodok (Russian for “Academy town”) in the Novosibirsk region has especially been making a name for itself as it seeks to make the transition from a former Soviet Union center of scholarship and science to a modern Silicon Valley-like hub. Dubbed “Silicon Forest”, it is projected to grow at 15% a year and has reeled in some international projects such as producing a web portal for media mogul Oprah Winfrey. The Russian state itself has promised the funding of a $650 million technology business district in order to further accelerate the IT growth in the remote Novosibirsk region.
While Yandex certainly dominates the domestic Russian market with a 65% market share compared to Google’s 22% it has failed to gain substantial market share in foreign markets. Hence it remains to be seen whether Yandex will be able to able to compete globally with Google.
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