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Analysis & Opinion
20.05.10 If You Google Me, I Will Yandex You
By Tai Adelaja

As far as Google and Yandex are concerned, the battle for supremacy in Russia’s online advertising market is a grim struggle for the soul of Mother Russia. Or, one can see it as a game of chess – one shrewd move here, another resolute move there – the aim of which is to drive the opponent into a frenzied stalemate. Yandex, Russia’s largest search engine, made one such move on Tuesday.

The company launched a new search site that it claims will give its Russian users the opportunity to search Web sites written in the Latin alphabet, an innocuous move that underscores the company’s eagerness to beat back attempts to assail its position as the local champion by world search giants like Google.

The new offering includes, the alpha version of the English language search engine, and an integrated global search filter on its site that would allow users in Russia, Belarus, Kazakhstan and Ukraine to search foreign Web sites. User queries in Latin script currently account for about 12 to15 percent (or 1.5 million to 2 million visitors) of all searches on Yandex.

Yandex said it has indexed four billion Web pages - mostly in English - over a two-year period in preparation for the launch. This is a far cry from Google, which reported back in 2008 that its search engine has indexed over one trillion unique Web pages from all over the globe, even after accounting for duplicates. “Our new offering is not in competition with Google,” Yelena Kolmanovskaya, the chief editor of Yandex, said by telephone. “Nevertheless, we enjoy competing with Google. As you can see, we are doing that with great success in Russia. It feels so good to compete with Google because Internet users gain from such competition. It keeps us on our toes.” Kolmanovskaya added that Yandex has built its own algorithmic and pay-per-click search interface and is more than ready to take Google head-on. “The upgrade includes a complete overhaul of our dedicated servers and the deployment of MatrixNet technology,” she said.

Last year, Yandex launched MatrixNet, a machine-learning technology that enables the search engine to control the relevancy of search results by generating a very long and complex ranking formula.

According to ComScore Networks, which tracks Internet traffic, Yandex was the fastest-growing search engine in the world last year, and ranked seventh in the top ten global search engines., which rates Internet sites in Russia, said Yandex presently commands a 63.6 percent market share compared to the 21.8 percent held by U.S.-based Google.

Can Yandex really rival Google inside and outside of Russia? Analysts and high-tech executives said it is still premature to talk of Yandex building a vastly superior search engine that could beat Google even in Russia. “The search engine war is not only about technology or features, but also about marketing and product positioning,” said Dmitry Malyavkin, the head of Internet research at Arton Consulting. “In many countries, Google remains the market leader and it will take more than one innovative product to unseat it.”

Yandex spokesman Ochir Mandzhikov insisted that competition with Google Russia is beyond the company’s immediate goal. “We do not plan to advertise our search services outside our traditional market. This is just an experimental service to test the pulse of search engine users and improve our services accordingly,” Mandzhikov said. “When search requests are made, we would like to give correct answers not just in Belarusian or Kazakh, but in English as well.”

However, the devil may well lie in the details. “Up until now, Russian Internet users used Yandex when they searched in Russian and turned to Google when they needed to find something in English,” said Konstantin Roshchupkin, an Internet marketing analyst at Ashmanov and Partners. The purpose of Yandex’s new Web site is to ensure that users would no longer need the “use-other-search-engines” option.

Google – founded by Larry Page and Russian-born Sergei Brin – would not comment for this article, but going by its track record, the Mountain View-based company is not taking the Russian challenge lying down. One of its earliest attempts to gain the number one spot in Russia was made in July of 2008, when it concluded a deal with Russia’s Rambler Media to buy ZAO Begun, Rambler’s context-advertising unit for $140 million. However, the Federal Anti-Monopoly Service scuttled the deal in October that year, saying that it had not been given adequate information. Rambler’s CEO Olga Turischeva has since said that the company no longer plans to sell the asset, adding that it was one of its most valuable units and accounted for about 30 percent of the company’s contextual advertising revenue in the first half of 2008.

In December of last year, Google partnered with, which controls about ten percent of the country’s market share, in a deal that saw Google replacing Yandex as the default search engine and ad server on the portal starting January 2010. However, it was not a perfect marriage, as said it would not allow Google to brand its search engine with the Google name and logo, as the search giant normally does. Google has enhanced its service in other ways to attract Russian users. The company has localized all its signature products including Google News, Google Mail, Picasa and Google maps. In addition to redesigning its Russian Search page for better usability, the company launched a special Russian Maps service, showing the locations of and providing directions to people looking for places or businesses all across the country.

Last year, Google intensified efforts to win the hearts and minds of Russians with the launch of its Virtual Trip on the Trans-Siberian railroad in cooperation with Russian Railways. The project aims to bring the legendary train ride to within a mouse-click of desk-bound adventurers in any part of the world. By clicking on a spot on the map, virtual passengers can skip ahead to any section of the Trans-Siberian, and watch mountains, steppes and far eastern villages flash by in high definition. “In its own way, the project also mirrors the formidable ambitions of Google, currently in a pitched battle with its top-ranked rival Yandex, to conquer Russia’s lucrative search engine market,” Aaron Mulvihill wrote in The Moscow Times.

But Google may need to redouble efforts and battle aggressive expansion plans from its main competitor in order to keep its loyal users in Russia. “Two years ago, Google made an aggressive push into the Russian search market, forcing Yandex to test different search algorithms in order to maintain market share. Since then, Google’s activity has been more modest and figures from showed that its market share has flattened out,” Roshchupkin said. “While Yandex revels in its newfound confidence, the company understands that it must leave nothing to chance, and that is why they are rolling out new products.”

Even as the online advertising market lost steam through most of 2009, Yandex reported a slight growth, which the company attributed to cheaper broadband connections and higher Internet usage in Russia. “There was an increase in the number of small-budget advertisers during the crisis,” Kolmanovskaya said. “Generally, context adverts for banking services went down, while adverts for cosmetics and beauty supplies went up. From the beginning of this year, we have seen an increase in advertisement for apartment repairs and renovation,” she added.

Yandex’s advertising revenue rose 14 percent last year. Sales climbed to 8.7 billion rubles ($287 million), Bloomberg reported. Yandex’s market share was 63.6 percent in April, leaving Google trailing far behind at 21.8 percent. In March, the local search champion registered 24.5 million hits compared to 19 million visitors recorded in May of 2009, figures released by the company show.

Malyavkin attributed Yandex’s stellar performance during the financial crisis to the fact that, unlike Google, it is much more focused and “has less on its plate.” “Google can hardly give the same attention or dedication to its business in Russia because it has many other interests around the world,” Malyavkin said. “Or perhaps I should simply say that for the average Russian Internet user, Yandex is much more fun.”
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