It takes something out of the ordinary to unseat Google from its customary first place in any market. But with 60%-plus of all search traffic in Russia flowing through Yandex, the company – also a significant presence in Ukraine, Belarus, and Kazakhstan – is a major player in the Russian-speaking world. By comparison, Google has just a quarter of the Russian-speaking market.
Of course, the internet is rarely bound by national borders, and since 2010 the company has offered www.yandex.com (as opposed to the Russian www.yandex.ru). At the time, the search engine referred to the move as ‘the beginning of a long journey’ – which could be taken as a nod towards the enormity of the work ahead, or alternatively, as a statement of intent for its ambitions.
And Yandex today seems to be flourishing. In 2011, it raised some US $1.3 billion on NASDAQ in the biggest dotcom IPO since Google. Meanwhile, by some measures, it has become the fourth biggest search engine in the world, after Google, China-based Baidu, and Yahoo. By late 2012 it was beating out Bing – at least in terms of the volume of search requests.
Russian literature – and Russia’s biggest search engine
Yandex was co-founded in 1997 by Arkady Volozh. The 50-year-old applied mathematics graduate is CEO and director of the search firm. Fêted as a serial entrepreneur, Volozh was GQ Russia’s businessman of the year in 2012 and has a personal fortune of some US $1.3 billion, according to Forbes. Graduating from Gubkin Russian State University of Oil and Gas in 1986, just as the Soviet Union was confronting its economic decrepitude, Volozh seized the opportunity to start a newly-legal private business, importing computers.
Co-founding a series of tech companies, including Arkadia and CompTek International, Volozh toyed with programmes to search Russian classical literature, before working with his schoolfriend, Ilya Segalovich. Having graduated from S. Ordzhonikidze Moscow Geologic Exploration Institute, Segalovich was following a similar path from the fossil fuel economy to the digital world. At Arkadia, Segalovich developed work on an application for non-structured information with Russian morphology – parsing the Cyrillic alphabet searches in the Russian language. In 1997, Segalovich became Yandex co-founder with Volozh, having coined the name from ‘Yet Another iNDEX’. Despite dying at just 48 in 2013, Segalovich found time to help orphans and special needs children by co-founding Moscow-based Maria’s Children Art Rehabilitation Center.
So why is Yandex thriving? Volozh has suggested a range of factors behind its success, including the relatively high internet usage by Russians– and its strong tradition of producing programmers. Add to that the awakening of a once-socialist nation’s dormant consumerism, and the conditions for triumph are clear.
On a technical level, the search engine is uniquely positioned to make sense of the Cyrillic alphabet used by Russian – a specialism beyond the globe-straddling focus of Google. Quite simply, Yandex understands the Russian language and its syntax better than Google, meaning the search results are better for users. So while the search giant struggles to gain a chokehold on niche markets, Yandex wins out in Russian with its better grasp of the local content. Even when used for searches in English, some say Yandex has a cleaner layout, less intrusive adverts – and similarly good results.
It’s not afraid to take on the king of the jungle, either. Just look at a recent Google-aping campaign. Rather than the traditional encouragement to ‘ask Yandex’, the thrust of this message is that the search engine now knows what you want – no need to ask. It’s the language of Big Brother; but employed in the digital fulfilment of capitalist dreams.
And Yandex is also not shy about taking the bull by the horns. In March it announced it has recently started to remove links from Moscow area commercial queries – as they were not adding to the quality of results. In their place, Yandex says it will measure how humans interact with sites to help determine ranking.
Enriching the ecosystem
Like the biggest internet companies, Yandex refuses to stand still. It has steadily increased its clout by acquiring smaller businesses to expand its portfolio. This includes improving aspects such as its geolocation capabilities through Israel-based KitLocate, or integrating KinoPoisk – ‘the Russian IMDB’ – into its search.
While it has expanded outside of former Soviet countries by entering the Turkish market, today Yandex is seemingly focusing on growing its product range for the domestic market. In addition to the core search offering, Yandex has the usual suite of email, cloud storage, maps, news, electronic payment systems, and many more. Then there’s the focus on mobile applications, which is set to see its services pre-installed on Android smartphones from two manufacturers.
The immediate future could be rocky though. Yandex has warned that the economic sanctions against Russia caused by the ongoing tension in Ukraine could have a serious impact on its business – an unfortunate situation for a company which has stood up to the government, and in support of a free internet.