Yandex sells Russian companies and flees the country with its best technology
After Moscow invaded Ukraine, “Russia’s Google” decided it couldn’t stay in Russia.
Moscow-based Yandex, the country’s dominant search engine founded by two Russian entrepreneurs, is hoping to transfer its most promising new technologies abroad and ditch most of its Russian business to avoid the impact of Western sanctions that have been imposed , after President Vladimir Putin ordered Russia into Ukraine.
According to the plan that the financial times As reported on Thursday, Yandex NV – Yandex’s Dutch-registered holding company – would sell most of its Russian businesses, including search, e-commerce and ride-hailing, to a local buyer. That New York Times later reported that Yandex NV would then shift its most promising technologies to non-Russian markets.
By cutting ties with Russia, Yandex hopes to protect its newer ventures, such as self-driving cars, cloud computing, and educational technology, from any connection with the Russian market. Western partners quit working with Yandex after the Russian war in Ukraine, including grocery delivery company Grubhub, which ended its robotic delivery initiative with Yandex days after the Russian invasion. New export controls also limit the sale of advanced technology components to Russia.
There are hurdles to Yandex’ plan. It would need to find a local buyer willing to buy its Russian stores. It would also need Moscow’s permission to transfer technology licenses abroad, and Yandex shareholders would have to approve the plan.
The plan is reportedly backed by Aleksei Kudrin, Russia’s former finance minister. Kudrin is expected to take a senior position at Yandex after the deal closes financial times.
Yandex did not immediately respond to a request for comment.
sanctions and staff exodus
Founded in 2000, Yandex controls about 60% of Russia’s search engine market and has invested in ride-hailing, e-commerce and news.
Although not state-owned, Yandex has developed a close relationship with the Russian government. Yandex agreed in 2019 to give the state a greater say in its operational decisions to thwart laws restricting foreign ownership of Russian tech companies.
The NASDAQ exchange suspended trading in Yandex shares shortly after the Russian invasion due to concerns about US sanctions. Shares of Yandex in Moscow have fallen by 60.3% year-to-date. The stock slump comes despite Yandex’ strong performance in the Russian market, where sales rose 46% year over year in the third quarter.
The Russian tech company has also been hit by the exodus of talented Russians leaving the country following the invasion of Ukraine. Over 10% of Yandex’s 19,000 employees have left the company, Bloomberg reported in August.
The European Union has also imposed sanctions on Yandex executives, accusing the company of promoting Russian pro-war propaganda on its news platform. The EU in March sanctioned Yandex deputy CEO Tigran Khudaverdyan, who was in charge of the news department.
Arkady Volozh, founder and then CEO of Yandex, sanctioned the EU in June, accusing him of supporting Russia’s invasion “materially or financially”. Volozh resigned as CEO on the same day. Yandex sold its news division to Russian tech company VK in August.
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