It’s Russia’s Google, a multibillion-dollar local tech company that dominates the country’s e-commerce, offering everything from search engine results and food delivery to ride-sharing and an online marketplace.
Yandex is an indicator of Russia’s high-tech economy in the 21st century.
Today, with Russia bombing Ukraine and the West hitting Russia with crippling sanctions, the company’s future is uncertain.
On March 7, Yandex announced the resignation of two board members, quoting them as saying “our hearts go out to the whole team in these difficult times.” A week later, the deputy executive director resigned, after being hit with European Union sanctions. Then Yandex announced that it was looking to sell two of its most visible content divisions to focus on its other businesses.
Western sanctions, meanwhile, led to the freezing of the company’s shares on US stock exchanges. This in turn has led to shareholders asking for bond collateral to be repaid, but the company says it doesn’t have the $1.25 billion to cover that amount.
The now-untradable stock is down nearly 80% from November, when Russia’s military buildup on the Ukrainian border began to draw public attention, wiping out more than $20 billion in market capitalization.
“The future of Yandex depends on the future of Russia, not the other way around,” said Esther Dyson, a well-known American technology consultant and investor who was one of two board members to step down. earlier this month, in an interview with RFE/RL.
Tonia Samsonova, who ran a question-and-answer service called Yandex.Q, quit in protest earlier this month, accusing the company of censoring the war in Ukraine from its search engine and service. information, which garners millions of daily views.
As President Vladimir Putin’s government seeks to impose loyalty and silence opposition to the war, Yandex risks becoming “a propaganda engine” for a “dictatorship”, she said.
“You, my former colleagues, are also responsible for this”
The Kremlin had cracked down on independent journalism and media companies for years, using a “foreign agents” law to tar and then punish a number of publications, broadcasters and individual journalists.
After the February 24 invasion of Ukraine, authorities took further action, criminalizing independent war reporting by making the dissemination of “deliberately false information” about the use of armed forces punishable by jail. It is also illegal to discredit the army.
Russian media, including some of the best-known independent outlets, have aligned. Some important organizations have been closed; journalists began to flee the country.
Yandex’s homepage is a major portal for Russian-language news and, as with Google in the West, a major driver of traffic to other media. Yandex News attracts about 30 million Russian users.
The headlines, however, began to guide readers to official, state-run or state-allied media companies. Searching Yandex News for the words “war” or “invasion” yielded no results.
On March 1, a former Yandex News official, Lev Gershenzon, posted a letter on Facebook in which he almost accused his former colleagues of complicity with the Russian state by hiding war news.
“The fact that a significant part of the Russian population can believe that there is no war is the basis and the driving force behind this war. Yandex today is a key element for hiding information about war. Every day and hour of such “news” is human life. And you, my former colleagues, are also responsible for it, ”he wrote.
Contacted by RFE/RL, Gershenzon, who left Yandex in 2012, declined to comment further, saying only that “if they had listened to me and done what I suggested, it wouldn’t be [have] past.”
“I’ve said what I want about this whole situation. I think that’s enough,” he said in a message.
On March 18, Yandex announced that it was looking to sell Yandex News as well as Yandex Zen, an infotainment channel, and focus instead on developing other businesses such as advertising, taxi services, trade electronics, self-driving cars and other businesses.
Dyson, who had been one of Yandex’s longest-serving board members, declined to give further details about what led to his resignation, which came after another person said. described as a contentious board meeting in February.
“In the current political environment in Russia, it has become impossible for the team to continue to provide a free and open information platform to the Russian public without breaking the law and putting the company and its employees at risk” , the company said on March 7. press release announcing their resignations.
Dyson also declined to describe the internal deliberations that took place around the search engine’s news and features.
“Now you get more and more propaganda results before you get search results,” she said. “First you have publicity, then propaganda, then you have news. You can’t get that information [about the war] on Yandex more.
When asked if there was an order or decree issued, either by the company or by a government entity, Dyson declined to answer directly.
“It’s not like the sun suddenly goes down and the next morning everything changes. It happens, like all these things, kind of gradually,” she said. “It was a bit before the invasion of Ukraine, but after the discussion about the invasion…again, things don’t happen overnight, you sort of feel like they’re happening. produce.”
The other board member who resigned, Ilya Strebulaev, a finance professor at Stanford University in California, declined to comment.
Yandex did not respond to multiple emails from RFE/RL seeking comment. A receptionist who answered the phone at the company’s Moscow headquarters said there would be no immediate comment and there was no immediate response to questions submitted by email.
“My father was in denial after the war started,” said Samsonova, a former Moscow-based journalist whose question-and-answer service was bought by Yandex in 2019 and renamed Yandex.Q.
She told RFE/RL that three days after the invasion, “I went to Yandex.ru to see the top five news articles. There was nothing [about the war]. I just realized that there is no way that he, who doesn’t speak English, could know about the news, about the war.
On March 2, Samsonova, who had been negotiating her exit from the company for several months, resigned “due to the fact that Yandex does not publish on its Yandex.ru homepage information that Russian forces are bombing Ukrainian cities and kill innocent people.”
“I view the company’s actions today as crimes and [they are] accomplices in invasion and war,” she wrote.
“This is not what Yandex was designed for”
Before the war, the screws were already tightening at Yandex, which currently employs around 18,000 people, most of them at its headquarters in Moscow.
Three years ago, the Kremlin sought to change its governance structure and essentially sought a veto on its board. A compromise plan got the government two board seats and a ‘golden share’ – giving the state ‘the power to block deals and temporarily remove Yandex’s management’ he deems it in the national interest”. according to the Financial Times.
The effort also coincided with the prosecution of Michael Calvey, an American investor who made a prescient $5 million investment in Yandex two decades ago. Calvey’s accusation, which ended up with a 5.5-year suspended prison sentence for embezzlement, spooked business circles, Russian and foreign.
Yandex’s revenue, driven largely by advertising, could slump as Russia’s economy heads for its biggest contraction since at least the early 1990s. Economists estimate Russia’s gross domestic product could down 15% this year.
Yandex’s other businesses outside of “content” continue to generate substantial revenue for the company. Yandex Eats, for example, is a leader in food delivery and, like its Western counterparts – Uber Eats, Grubhub, Deliveroo, Frichti – it has thrived during the COVID-19 shutdowns imposed in Moscow and other Russian cities. .
Yandex Eats made headlines this week after hackers accessed and leaked a database containing thousands of names and addresses across Russia. Regulators said they were investigating.
The sale of the news division is inevitable, Dyson said.
“As a foreigner, I would say the sooner they can do it [the better.] And by sell, I mean ‘sell’ in quotes,” she said. “It will be sold.”
“If the content is going to represent the government, it might as well belong to the government. Or by close people,” she said.
“I have no questions about the company itself. I have questions about its ability to…[keep] provide real information,” Dyson told RFE/RL. “I hung on for as long as I could,” she said.
Samsonova predicted that Yandex would continue to operate in Russia even if the government further restricted the free flow of information.
“Yandex will stay in Russia, it won’t go anywhere,” she said.
“But whatever about Yandex now – there is a building, there are accountants, engineers, mergers and acquisitions specialists – this is not what Yandex was designed for”, a- she declared.
“What will Yandex be like during a military dictatorship? ” she says. “It will be a propaganda engine.”