Yahoo Probably Considering an Acquisition in Russia

Yahoo is one of the companies that is incredibly late in the Russian market: it has not paid any attention to it for years now and I have not seen any signs of this situation actually changing any time soon. The company does not have any office in Russia, many of its products do not “speak” Russian and there are no specific plans for this huge and rapidly growing market that has already been noticed by many of the leading international internet players. Today I’ve read an interview of Mr. Marvin Liao, Director, Sales Development, Emerging Markets Group at Yahoo to one of the leading Russian publications where he explained their position and plans for the Russian market. And after reading the interview I have a very strong feeling that we will see some kind of an acquisition of a local player - even though not exactly soon.

Mr. Liao has clearly explained that we should not expect to see Yahoo in Russia in its full strength soon - simply because the market is too complicated to make any careless steps here. At least it is good that the marketing team over at Yahoo understands that the market is very complicated and already has enough established players of its own. After all, entering the market now when we have our own giants like Yandex and Mail.ru and even international giants like Google struggling to get to the top as well, is very different from what it could be some 8 years ago when the market was far from established and opportunities were so very much simpler.

Speaking about competition in the Russian market, Mr. Liao obviously realizes that they are not going to compete in the search market here: Yahoo’s deal with Microsoft has obviously left Yahoo without any intentions to compete in the search market at all and competing with Yandex and Google is definitely not what they want to have in Russia as they could only expect a tiny portion of the market anyway. Instead, they are planning to focus on more media and content-oriented portals like local Rambler and Mail.ru - which is also absolutely in line with the new Yahoo PR strategy of focusing on the user and his or her needs and interests.

But understanding the market and the competition does not make Yahoo more willing to jump to the market immediately: instead they prefer to wait and see what they should expect here and how to approach the market best to make sure their entrance is a good one. The plans for Russia are very ambitious: while currently their estimation is that Yahoo monthly audience in Russia is 7-8 million of people, their final goal is 35-40 million of people which must sound huge given that the total monthly Russian internet audience is currently lower (28 million) but given that the internet population grows at amazingly high rates in the country, Yahoo hopes may not be as unreasonable as they seem to be - even though achieving such results must mean they should become a household name here, something similar to Yandex and LiveJournal.

But of course getting close to an ambitious goal like this one must mean that entrance should really be spectacular and very safe as well - to make sure they achieve the goals they have. Mr. Liao does not mention any specific plans of how they will be entering the Russian market but partnership with a local player and even an acquisition both sound like good options judging by his words. He specifically points out that no negotiations are under way so that we don’t expect any announcements actually soon but his tone makes me think that they are carefully selecting another side for such negotiations right now.

Mr. Liao also explains that at this particular moment Yahoo is short on resources that they could use for such an acquisition - or some other definitive actions - so no specific time is mentioned for now because they prefer to stay away from the market to spoiling their appearance by some inappropriately chosen strategy. All in all, this sounds like a reasonable strategy but I can’t help but wonder what type of actions they will choose to finally enter the market that is growing faster than they expected - because something definitely spectacular is obviously needed for a market you’ve been ignoring for so long.

Via (in Russian)