Yandex to sell businesses in Russia, leave the country with the best technology

After Moscow invaded Ukraine, ‘Russia’s Google’ decided not to stay in Russia.

Moscow-headquartered Yandex, the country’s dominant search engine founded by two Russian businessmen, hopes to shift its most promising new technologies abroad and divest most of its Russian business. to avoid the effects of Western sanctions imposed after President Vladimir Putin’s invasion of Ukraine.

Under the plan, where the Financial Times reported on Thursday, Yandex NV—Yandex’s holding company registered in the Netherlands—will sell most of its businesses in Russia, such as search, e-commerce and ride-hailing, to a local buyer. the New York Times later reported that Yandex NV will then transfer its best technologies to non-Russian markets.

By cutting ties with Russia, Yandex hopes to protect its new businesses, such as self-driving cars, cloud computing, and education technology, which are not connected to the Russian market. Western partners canceled cooperation with Yandex after Russia’s war in Ukraine, including food delivery company Grubhub, which completed its Yandex delivery robot project days after the Russian invasion. The new export controls also limit the sale of advanced technological components to Russia.

There are obstacles to Yandex’s plan. Need to find a local buyer willing to buy Russian businesses. Moscow’s permission is also needed to transfer technology licenses abroad, and Yandex shareholders must approve the plan.

The plan is reportedly supported by Aleksei Kudrin, Russia’s former finance minister. Kudrin is expected to take a leading position at Yandex once the deal is completed, according to Financial Times.

Yandex did not immediately respond to a request for comment.

Sanctions and a staff exodus

Yandex, founded in 2000, controls about 60% of the Russian search-engine market, and has invested in ride-hailing, e-commerce and news.

Although it is not state-owned, Yandex has established a close relationship with the Russian government. Yandex in 2019 AGREES to give the state a greater say in its operational decisions in a bid to ward off legislation that limits foreign ownership of Russian tech companies.

the NASDAQ The stock exchange suspended trading of Yandex shares after the Russian invasion due to concerns about US sanctions. Shares of Yandex in Moscow have fallen by 60.3% since the beginning of the year. The stock plunge comes despite Yandex’s strong performance in the Russian market, with revenue up 46% in the third quarter year-on-year.

Russian technology companies have also been hit by an exodus of Russian talent who left the country after the invasion of Ukraine. More than 10% of Yandex’s 19,000 employees have left, it was reported Bloomberg in August.

The European Union has also targeted Yandex executives with sanctions, accusing the company of promoting Russian pro-war propaganda on its news platform. The EU allowed Yandex Deputy CEO Tigran Khudaverdyan, who is responsible for the news division, in March.

The EU sanctioned Yandex founder and then CEO Arkady Volozh in June, accusing him of “materially or financially” supporting Russia’s invasion. Volozh resigned as CEO on the same day. Yandex sold its news division to fellow Russian tech company VK in August.

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