Yandex, commonly referred to as “Russia’s Google,” has announced its decision to pull out of its home country. The Dutch-based parent company of Yandex sold its operation in Russia for 475 billion roubles ($5.2bn; £4.2bn), significantly below its estimated market value. This sale to a consortium of investors marks the transformation of Yandex’s Russian business into a fully Russian-owned entity. While the deal has been welcomed by Moscow, it raises several important implications and the need for caution.
Firstly, this move reinforces concerns of censorship and information control within Russia. Yandex has been accused in the past of concealing information about the war in Ukraine from the Russian public. The sale to Russian owners could potentially worsen the situation, as the company may become more susceptible to government pressure to manipulate search results and restrict access to certain content. This has serious implications for freedom of information and democratic principles.
Secondly, the sale of Yandex at a significantly lower price than its market value raises questions about the fairness and transparency of the deal. The discrepancy between the market value and the sale price suggests potential interference or coercion by the Russian authorities. Such actions can deter foreign investors and undermine confidence in the Russian business environment. This may have broader implications for the economy and investment climate in Russia.
Furthermore, Yandex’s departure highlights the trend of foreign-owned businesses exiting Russia. Various companies have chosen to sell their assets in unfavorable terms or face seizure by the Russian government. This indicates the challenging business and political environment that foreign companies encounter in Russia. The negative experiences of Western brands like Danone and Carlsberg, whose assets were seized by the Russian authorities, serve as cautionary tales for future foreign investors.
Additionally, the departure of Yandex raises concerns about the impact on the Russian society and economy. Yandex is not just a company but also considered an asset of the entire Russian society. Its services, including search engine, mapping, advertising, taxis, and food delivery, have become integral parts of the daily lives of millions of Russians. The transfer of ownership to a Russian consortium may bring uncertainties regarding the company’s future direction, innovation, and quality of services. This could potentially impact the technology landscape and disrupt the convenience that Yandex has provided to Russian consumers.
Another notable aspect is the involvement of Yandex’s co-founder, Arkady Volozh, in publicly criticizing Russia’s invasion of Ukraine. His departure from the company in 2022 and subsequent EU sanctions against him demonstrate the political implications of dissenting voices in Russia. The situation raises concerns about the stifling of free expression and acts as a reminder of the risks associated with openly opposing government actions in Russia.
In conclusion, Yandex’s decision to exit Russia and its sale to a fully Russian-owned entity have significant implications for freedom of information, foreign investment, and the Russian society. The move reinforces concerns about censorship and information control, raises questions about the fairness of the deal, and highlights the challenges faced by foreign-owned businesses in Russia. It also brings uncertainties regarding the company’s future and impact on Russian consumers. Caution should be exercised by investors and international observers when assessing the evolving landscape of technology and business in Russia.
