Yandex’s Exit from Russia: A New Era for the Russian Tech Giant

The tech industry has witnessed a significant shift in the business landscape of Russia, with Yandex, the country’s leading search engine and tech company, announcing its departure from its home market. The Dutch-based parent company of Yandex sold its Russian operations for 475 billion roubles ($5.2bn; £4.2bn), marking the end of an era for the Russian tech giant.

Founded in the late 1990s, Yandex has been a pioneer in the Russian tech scene, developing its own search engine, mapping, and advertising businesses. The company’s services expanded to include taxis, food delivery, and other digital offerings. Despite its nickname as ‘Russia’s Google,’ Yandex has no ties to the US search engine giant or its parent company, Alphabet.

The sale of Yandex’s Russian business to a consortium of investors has made it a fully Russian-owned entity. The deal, which was the product of an extensive period of planning and negotiation over more than 18 months, was welcomed by the Russian government. Anton Gorelkin, deputy head of the Russian parliament’s committee on information policy, expressed his satisfaction with the outcome, stating, “Yandex is more than a company; it is an asset of the entire Russian society.”

Yandex’s exit from Russia comes amidst a wave of foreign businesses leaving the country. Since Russia’s invasion of Ukraine, many foreign-owned companies have sold their assets on unfavorable terms or been seized by the Russian government. Yandex’s co-founder, Arkady Volozh, one of the few top Russia-linked businessmen to publicly speak out against Russia’s invasion of Ukraine, left the firm in 2022. Both Yandex and Volozh have been hit with sanctions by the European Union, which accuses the company of promoting state media and narratives in its search results and deranking content critical of the Kremlin.

The European Union’s allegations against Yandex are not new. Experiments by BBC Monitoring in 2022 showed that Yandex’s search results failed to report Russian atrocities in the Ukrainian city of Bucha. The company has been under pressure to comply with the Russian government’s demands over its content, leading to the sale of some of its online resources to state-controlled rival VK in late 2022.

Despite presenting itself as an independent entity, Yandex’s exit from Russia raises questions about its relationship with the Russian authorities. The company’s departure comes at a time when the Russian economy is facing significant challenges, with inflation soaring and the rouble falling. The Bank of Russia has responded by raising interest rates to 15%, in an attempt to lower inflation and boost the currency.

The sale of Yandex’s Russian operations is believed to be significantly lower than its market value, which was estimated to be almost $30bn in 2021. The reasons behind the lower sale price are not clear, but it is speculated that the political climate in Russia may have played a role.

The departure of Yandex from Russia marks a new chapter for the tech giant. The company will continue to operate its international businesses, which include search, maps, and advertising, under the Yandex brand. Its exit from the Russian market, however, leaves a void in the domestic tech landscape. It remains to be seen which company will emerge as the new leader in the Russian tech sector.

In conclusion, Yandex’s exit from Russia is a significant development in the Russian tech industry. The sale of its Russian operations to a consortium of investors marks the end of an era for the Russian tech giant. The reasons behind the sale are complex, with political and economic factors playing a role. Yandex’s departure leaves a void in the Russian tech landscape, and it remains to be seen which company will emerge as the new leader. The future of the Russian tech sector is uncertain, but one thing is clear: the landscape is changing, and Yandex is no longer a part of it.