Yandex Proves We Don’t Have Bears on the Streets in Russia

It is invariably funny to watch people’s reaction when I mention that in addition to having a Russian name I actually happen to work from Russia. People seem to actually want to ask if we actually have any broadband connection here. I believe this is the same for many people outside of the US working in the social media blogging or launching their own startups. And this is why I actually have to admit I am a bit internationally biased and when I get a piece of news from a startup located somewhere in Europe or Asia, I’m normally very much inclined to check it out and review it on Profy when worth it.

This is why I am kind of proud of seeing an article at the Times of London about the Russian search engine Yandex not only competing with Google but actually having a larger market share here in Russia than the search giant - 55% versus Google’s 21%. The article provides tons of interesting statistics and financial information about Yandex and the exciting plans it has for the future, including opening an office in the Silicon Valley and hiring the best engineers across the ocean to further boost the company’s innovation.

I am not sure if I should be proud of the fact that Russia is one of only 4 countries in the world that do not have Google dominating the search market. Moreover, since I rarely visit Russian sites myself or do any kind of search in the Russian segment of the internet, I myself am completely dominated by Google. What’s more, I have not heard the word “yandex” used as a verb here same as the majority of the web population uses “to google”. But it does show something that Yandex is changing its logo to the fully Cyrillic one to demonstrate the fact that it has reached the status of a household name here.

But Russia is definitely a good lesson for Google and other international internet giants trying to dominate every country in the world: for some countries simply localizing the products (and even Google is very far from perfect in their translation process) is not nearly enough to get a significant market share. Sometimes local companies simply understand local consumers better and can offer the products that actually meet their needs and expectations instead of simply offering what everyone in the world is supposed to be happy with. Contrary to Google Yandex has a technology that better corresponds the Russian language and thus permits to perform more refined search for the Russian-language segment of the internet. Even Google seems to fully realize that its own search technologies are not exactly what everyone should be happy with, they actually admit that they have some difficulties with the Russian language in particular.

And even though Paul Glazowski seems to think that losing within one local market does not mean that a global domination is threatened (and even if I myself can agree with him to a certain extent) Russia is definitely a market worth fighting for - and that Google seems to understand very well. There is quite a simple explanation to the blooming internet industry in Russia: in addition to lots of clever engineering minds here (that happen to earn here as much as they could if moved to Silicon Valley) we have the fastest growing internet population in Europe (soon to make Russia the largest internet country in Europe) simply because for a long time the number of users was not all that significant. Now that internet service providers have started to offer affordable services (by the way, I used to pay over $100/Gb only last year for ADSL connection at home) people are jumping on the bandwagon discovering all the cool things the world wide web has to offer.

But when they think of those cool things, they normally think about those products and sites they are made aware of through the word of mouth or via advertising and product placement on TV. So when people do get an access to the WWW, they rarely think of Gmail or Facebook - instead they go to Mail.ru and Odnoklassniki.ru (and Yandex for search, naturally) and that’s where they establish their first online presence.

Where I see most troubles for Google is in advertising market here in Russia. After its recent acquisition of Begun from Rambler, another Russian search engine/internet portal, Google will have to compete with Yandex not only in the search space and various web services (including email and blog search), it will also have to compete with Yandex Direct in the huge and rapidly growing contextual advertising market. But here only time will tell how the situation will evolve in the field where money is to be made and if we see a healthy competition or a new monopoly emerging again.

But anyway it is refreshing to see a successful Russian internet company showing the world that Russia still has a lot to offer and now that the company is getting ready for the IPO on Nasdaq some time in fall it should be remarkable that it is getting coverage in international mainstream press. Hopefully it will also help me in explaining people in the US that we do have a lot of high-tech things that are good and sometimes even better than international analogues. And after all I would like to have everyone’s attention here: we never see bears walking the streets.

P.S. Oh, and we do have them in zoos: