Yandex NV (YNDX) Points to Central Asian Internet Growth

Page 1 of 2

The Russian search engine giant Yandex NV (NASDAQ:YNDX) recently surprised Wall Street by revealing that it has surpassed Microsoft Corporation (NASDAQ:MSFT)’s Bing to become the fourth biggest search engine in the world in terms of number of searches (according to ComScore’s 2012 data). A total of 4.6 billion searches were conducted on Yandex in November and 4.8 billion in December as opposed to Bing’s 4.5 billion searches in each of those months. However, this says more about the relative popularity of Microsoft’s sites than it does about changes within the search business. Ultimately this is good news for the growth of Russian Internet usage and Yandex itself, but Bing’s inability to truly grab market share from Google Inc (NASDAQ:GOOG) and Baidu.com, Inc. (ADR) (NASDAQ:BIDU) is a separate issue entirely.

Yandex NV (NASDAQ:YNDX)

December 2012 data
Name Stock YTD Searches (Mn) Unique Searches (Mn)
Google 11% 114,734 1167
Baidu -3.42% 14502 293
Yahoo Sites 3.02% 8630 292
Yandex 14.72% 4844 74
Microsoft Sites 3.14% 4477 268

Yandex is the dominant search engine in Russia, a country with 67.9 million Internet users that represent 13.1% of the total European Internet population, making it the biggest Internet market of the continent, ahead of Germany’s 67.4 million, the UK’s 52.7 million and France’s 52.2 million users. However, the German, French and British markets have more than ~80% Internet penetration while Russian users represent only 47.7% of the total population, which is significantly lower than the European average penetration of 63.2%. In terms of unique IP addresses only, Akamai Technologies, Inc. (NASDAQ:AKAM)’s ‘State of the Internet’ report states that Russia has 15.89 million IPs while Germany, France and UK have 81.7 million between them. The upshot is enormous opportunity for growth in Russia for Yandex as well as the rest of the Cyrillic-using world.

Online advertising is also on the rise in Russia and increased by as much as 35% in CY-2012 while total advertising in the country grew just 13% in the same period. Text based ads form the backbone of Yandex, and this is how the company has earned almost all (90%) of its $253.2 million in revenues in the third quarter; up 41% from last year. Net income came in at $74.2 million, up 34% year over year. Yandex holds more than 60% of Russia’s total market share, and until the end of its third quarter it had more than 202,000 advertisers, whose number is up 28% year-over-year and up 5% sequentially. The company’s dominance in Russia is expected to continue in the future as well, as Russian users prefer searches in their national language and Yandex does offer better user experience due to its strong network of local advertisers. Online advertising in Russia is expected to rise at an average rate of 22% until 2016, which will be reflected in Yandex’s revenues.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!