Why Google Isn't Winning in Russia

Photographer: Andrey Rudakov/Bloomberg

The logo of Yandex NV sits outside the company's headquarters in Moscow. Yandex said yesterday that it has purchased 2 million shares since March, when it announced a buyback program for as many as 12 million shares to support stock prices. Close

The logo of Yandex NV sits outside the company's headquarters in Moscow. Yandex said... Read More

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Photographer: Andrey Rudakov/Bloomberg

The logo of Yandex NV sits outside the company's headquarters in Moscow. Yandex said yesterday that it has purchased 2 million shares since March, when it announced a buyback program for as many as 12 million shares to support stock prices.

There are few parts of the world where Google's search engine doesn't stand a chance. China, where Baidu is dominant, is one. And Russia, where Yandex rules, is another, as my colleague Halia Pavliva reports.

With all of its success on the Web and the rise of Android to the top of the smartphone world, it's easy to forget that the company faces huge cultural hurdles - and entrenched competitors - in making its search engine truly a world-beater.

Pavliva's report about how The Hague-based Yandex has amassed the most buy ratings on its stock since 2011 and is now favored over Google by equity analysts shows the uphill battle the Silicon Valley giant faces abroad.

Yandex, which is Russia's most-used search engine, has an analyst score of 4.6, with a 5 indicating a buy and 1 a sell, while Google scores a 4.3, according to data compiled by Bloomberg. Yandex's dominance of the Russian search market - with 62 percent market share compared to Google's 26 percent - gives it an overwhelming advantage in attracting advertisers and generating profits.

“There are very few companies in the world that can compete with Google, and Yandex is one of them and the only one in Europe,” said Konstantin Belov, an analyst at UralSib Financial Corp. in Moscow, who has rated Yandex a buy since the end of 2011.

To listen to Google's earnings calls, you'd be forgiven for thinking that Russia, co-founder Sergey Brin's home country, barely registers on Google's radar. In the past year or so, executives have mentioned Russia just a few times, to talk about Android, Nexus 4 or a Russian version of Street View.

Most of the time, no one brings up Russia at all.

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