Yandex Labs CEO Vish Makhijani, a former Yahoo executive, will be leaving his operational role at the company, we’ve learned, and will be taking a new “senior operating role” at fast growing Zynga. He’ll start at Zynga in June and will join the Yandex board of directors.
Makhijani joined Yandex, the largest Russian search engine, in June 2008, less than a year ago, to create Yandex Labs. The labs group is a Silicon Valley based tech and business development project with ten or so employees. Arkady Borkovsky, currently CTO of Yandex Labs, will be taking over the group.
It’s a little unusual that Makhijani would leave Yandex so soon after joining, given how well the company is doing. They filed to go public late last year on 2008 revenues of more than $300 million, but later pulled the registration statement. The company has 1,700 employees.
But Makhijani says he’ll continue to work with Yandex at the board level, and has accomplished much of what he set out to do with Yandex Labs. And he’s exciting about working with Zynga, which is clearly on IPO or big buyout track itself with annual revenue in the $100 million range.
Prior to Yandex Makhijani was SVP and General Manager of the Yahoo Search Group. He left amid the general chaos at Yahoo last year.
BREAKING NOW: Google is buying Russian contextual advertising company ZAO Begun for $140 million from UK-registered Rambler Media (many Russian firms now base themselves in the UK). Rambler owns 50.1 percent of Begun, so to secure the deal it is buying the remaining 49.9 percent stake from owner Bannatyne Limited and then selling the entire firm to Google. Rambler says it expects to net about $50 million from the deal which will finance its investments and potential acquisitions.
Simultaneously Google announced (fairly obviously) that Rambler will now use Google AdSense for Search and AdSense for Content services.
The contextual advertising market in Russia is worth $225 million billion but Google has, until recently, not made much indent into the market which has grown over two and a half times since 2006. Yandex, the Russian search engine and one of the biggest Russian Web portals online since 1997, could account for 64% of the market , accounting for $145 million. [UPDATE: MindShare Interaction recently predicted the Russian online ad market would hit $685 million this year].
From the press release:
Rambler Media Ltd. (“Rambler” or “the Company”), operating one of Russia’s most popular internet brands, announces that it has agreed to sell its contextual advertising company ZAO Begun (“Begun”) and related subsidiaries to Google. Rambler currently holds 50.1% of Begun. The transaction will consist of Rambler buying the remaining 49.9% stake in Begun from Bannatyne Limited, affiliated with the Finam group of companies, immediately after which Rambler will sell 100% of Begun to Google subject to certain approvals and conditions precedent for a total cash consideration of US$140 million, of which US$69.9 million is attributable to Bannatyne, with customary closing adjustments.
Rambler’s net gain from the disposal is expected to be approximately US$50 million after all direct costs associated with the transaction. Proceeds received in respect of the sale of its holdings in Begun will be retained by the Company for further investments and potential acquisitions in line with Rambler’s stated strategy. The Company’s net cash position after the completion of this sale is expected to reach US$100 million. The Company’s directors consider, having consulted with its nominated adviser, ING, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
Google is the world’s most popular search engine. Begun is one of Russia’s leading search and contextual text based advertising services with local expertise, efficient sales systems and the number of its advertisers exceeds 40,000. Begun’s partner network includes over 143,000 Russian language sites.
Will bus stop and subway advertising to the tune of an estimated $250,000 per month help Google gain search market share against Russia’s home grown leader Yandex? The company is launching “”Moscow 2.0,” which includes over 5,000 outdoor advertisements across Moscow.
Yandex, with nearly 50% market share, is preparing a Nasdaq IPO. Google has around 31% market share.
Translated version of the story is here, and see the Quintura blog.
The Google of Russia is Yandex, and it is preparing for an IPO on Nasdaq in the fall with the hopes of raising $1.5 billion to $2 billion, reports Reuters. That would give the company a $5 billion valuation. Yandex was founded 15 years ago and the last funding I can find was only $5.3 million back in 2000, according to Quintura CEO Yakov Sadchikov (Quintura is a smaller search engine also based in Russia). If that is all the company raised, it will be a huge payday for investors ru-Net Holdings, Baring Vostok Capital Partners, and Tiger Technologies.
Yandex has a bigger search market share in Russia than Google (it is the biggest site in Russia overall). And in Europe it is the No. 3 search engine, ahead of Yahoo and Microsoft. Globally, it is in the top 10.
Its revenues, though, are not that large, considering its ranking. In 2007 it reported only $167 million in revenues, which was a 130 percent increase from 2006. Founders Arkady Volozh (CEO) and Ilya Segalovich (CTO) still run the company.
While Google dominates the top slot in search both in the U.S. and worldwide, with a global search market share of 62 percent, there is still a lot of elbowing going on below, especially when you look beyond the U.S.
In a comScore ranking of the top-10 global search engines as measured by number of searches during the month of December, 2007, Yahoo comes in at a distant No. 2 with only 13 percent of global share. (Although, in the U.S., Yahoo actually gained a half-point of share in December, whereas Google dipped 0.2 percent). The big surprise, though, is the strength of local search engines in countries that don’t use the Roman alphabet. No. 3 on the list is not Microsoft, but Chinese search engine Baidu (with 5 percent share, versus Microsoft’s 3 percent). No. 5 is Korea’s NHN Corporation, which operates the Naver portal and search engine. Creeping up on Ask’s No. 8 spot, is Russian search engine Yandex. And Alibaba (which may include Yahoo China) brings up the rear at No. 10.
Shouldn’t the best search technology win no matter what the language? These market share figures suggest that culture and marketing play a big role as well—unless, of course, you are Google.
