“We are joining the game to contribute to competition that ensures freedom of choice for the end user and other members of the market,” Alexander Zverev, head of the Yandex.Store project, said in a statement.

Yandex is fast becoming a serious contender: its search dominance in Russia has helped it overtake Microsoft’s Bing on a global level (at least, measured by searches, rather than users) and it’s also becoming increasingly popular in the Ukraine and Turkey, where its Yandex.Store will soon open.

The store’s mostly free 50,000-plus apps include familiar fare such as Skype and Foursquare, but also local treats such as the VK and Odnoklassniki social networks. Users can download it for themselves, but in its core markets, the Yandex.Store will be preinstalled on Android devices from manufacturers PocketBook, texet, Wexler, Oppo, Explay and 3Q. App sales revenues are shared between Yandex and those manufacturers, and the web firm also gets to make money off mobile search, much as Google does.

But that’s not the end of the story – Yandex.Store is also available as a white-label product for operators around the world, from the U.S. to Germany. And in those cases, Yandex will share revenues with the carriers. One Russian operator, MegaFon, is already using a rebranded Yandex app store called GetUpps.

In the case of both manufacturer and carrier partners, Yandex is also offering the opportunity to add payment methods of their choice – operators could for example make their own mobile payment service the mechanism for buying these Android apps.

To top it off, Yandex is also offering an updated version of its 3D Yandex.Shell UI, which device manufacturers can license.

This company keeps adding new ways to take the Google out of Android. And why not? It’s there for the taking, and Amazon has already done more-or-less what Yandex is doing on the Kindle Fire. If you take the view that Google is displacing the Android brand with its own, it’s a completely logical reaction on the part of any company that sees Google as a rival, not a partner.

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And it seems to be doing surprisingly well in that field. In fact, according to the latest comScore qSearch data covering the end of last year, Yandex has definitely now overtaken Microsoft in search, measured on a worldwide basis.

That actually first showed up in November’s stats, when Yandex processed 4.62 billion search requests to Microsoft’s 4.48 billion requests, but that meant each had roughly 2.6 percent share, and with such things you want to see a continuing trend. Sure enough, in December 2012 Yandex handled 4.84 billion requests (2.8 percent share) and Microsoft 4.48 billion (2.5 percent share). It’s a trend.

By way of comparison, Google is still thrashing everyone else, handling 114.73 billion requests in the same month for a 65.2 percent market share. China’s Baidu is next with 14.5 billion (8.2 percent), then Yahoo with 8.63 billion (4.9 percent). Yeah, I know Bing powers Yahoo search, but we’re talking about those consciously searching through what comScore terms “Microsoft sites” here — some of that will be searches through Office and Windows Live, but most will be explicitly through Bing itself.

The weird thing about the stats is the number of unique searchers — for December, Microsoft had 268.6 million of them, and Yandex just 74.4 million. Here we need to bear in mind that language is a factor. In English-speaking countries for example, people may use a variety of search engines when they’re not using Google, the clear market leader. In Russia, Yandex has more than 60 percent of the search market, and people who use it probably just use it a lot on average.

Then there’s the fact that Russia’s internet market is growing really quickly, and so is the market in Turkey – another key country for Yandex.

Whatever the reasons, Microsoft is now down to fifth place in the global search stats, at least according to comScore’s data.

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When Wonder launched in the U.S., Russia’s Yandex was keen to maintain that it wasn’t a ‘search engine’ – it just helped people search for information from within specific networks. Facebook, which recently launched its own network search capabilities, didn’t see things that way, and shut off its Graph API
to Wonder almost immediately.

“It was confirmed that Facebook views the application Wonder as something that violates the Facebook Platform Policies and that the access to Facebook’s Graph API will not be restored,” Yandex said in a statement on Wednesday.

“Wonder’s functioning, in its current state, as well as the quality of user experience it provides, largely depends on the access to Facebook’s Graph API. Since this access was revoked, we decided to put our application on hold for the time being.”

Yandex went on to say it was considering partnership opportunities with other social networks. But really, without Facebook the app has a big hole in it for many if not most users.

Which is a shame, given that Wonder is all about letting users search across the data and human connections that they themselves have donated to Facebook and others. That’s not how Facebook sees it, though, so – at least for now – end of story.

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The technology in question is called MatrixNet. It’s a machine learning tool that helps Yandex rank search results for relevancy, but in this case CERN is testing it out alongside other proprietary Yandex data-processing technologies in order to pick rare but important events out of the masses of data produced in CERN’s experiments. Essentially, it is being used to more accurately establish statistical relevance, so that CERN can call something a ‘major discovery’ with more certainty.

The research facility is already using MatrixNet to sift through data on B-meson decay analysis (this is part of the quest for supersymmetry, which tests the boundaries of the Standard Model of physics), but now CERN will also see whether it can help across other aspects of its work.

To accomplish that, Yandex has been brought in as an associate member of CERN openlab, the mechanism CERN uses to collaborate with private-sector IT firms such as Oracle and HP. This is actually an expansion of Yandex’s work with the research facility, as it has already been supplying it with computing resources since 2011. The company also came up with a specialized search tool last year for the data emanating from one of the Large Hadron Collider experiments.

CERN openlab head Bob Jones said in a statement:

“Today’s physics deals with large datasets that need to be properly processed and interpreted. New discoveries are all but impossible without meticulous data analysis. To this respect we are very interested in using and testing the services and technologies Yandex is developing.”

This is sort of a sponsorship deal, giving Yandex added respectability, but it’s also win-win from a technological standpoint — after all, we’re talking about machine learning here. As Yandex’s Andrey Ustyuzhanin put it: “Being a CERN openlab associate member opens up new opportunities for contributing to the organization’s projects and gives us a wide access to the LHC experiment data. These datasets allow us both to improve our technologies and contribute to advances in physics.”

The Russian web giant previously had to supply CERN with specialists in order to work with MatrixNet, but it said in Monday’s statement that it is developing “a user-friendly service that will give physicists an opportunity to use Yandex’s machine learning technology on their own”. It’s not clear whether this is to do with the fact that MatrixNet is proprietary, but it is worth pointing out that Yandex’s willingness to even let outsiders near its secret search sauce sets it apart from chief rival Google.

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The product allows users to store their media and files in the cloud, and share them among different devices and users. It launches with mobile applications for both Apple and Android ecosystems, and seems to have taken care to consider the mobile experience, which is essential for such cloud storage propositions. The Yandex app will let people send links to new content stored in the cloud, as opposed to sending the full download over the mobile network (this is great if you’re close to hitting your mobile cap.) The Yandex.Disk app also offers an immediate upload option for pictures taken from within its mobile app.

Yandex sites attracted 48.6 million unique visitors in June 2012 and the company has expanded its operations to the U.S. with Yandex Labs based in San Francisco.

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With major music services like Spotify and Rdio yet to launch in Russia, Yandex plans to announce the iOS app later on Wednesday, offering users the chance to tap into its Yandex Music service and pay for the right to stream direct to their handsets or iPods.

But while the subscription proposition is fairly common among international services, it’s not the norm everywhere — and that could prove tricky.

Most music services in Russia are free, including the web-based version of Yandex Music, which launched in 2009. In order to take that service mobile, however, the company is asking people to pay 199 roubles each month (around $6) for the right stream a library of music that currently holds more than 3 million tracks by 80,000 artists over the air to their phone.

There are subscription services available locally, including Zvooq.ru, which charges $5 a month for mobile and offline access — but, like Yandex, it still offers a free web player.

Yandex, which owns around two-thirds of the Russian search market, is clearly hoping it can covert some of its 5 million monthly web listeners to go the mobile route. But even it can convince them, just 2 percent of Russians use iPhones and — perhaps more importantly — the Russian music market is relatively undeveloped, with total sales across all formats of less than $100 million for 2011.

Turning profit in a market that is heavily reliant on piracy is tough — but could prove a significant bonus for the first company to really crack the problem, as Zvooq’s founders told the Financial Times last year:

“Some people see piracy as a threat, but we see it as a ready market with tens of millions of people consuming music online. It’s an opportunity,” says Simon Dunlop, one half of the duo behind Zvooq.ru, the online music service (whose name reflects Russian zvuk “sound”).

“If you have an established pirate market, it forces you to be that much better because you are competing with the free stuff,” he says.

Still, most potential entrants are steering clear for now. While our map of the worldwide market shows that there are 13 digital music services available locally, most international players have stayed out. Only Deezer and YouTube could really be considered global services: Spotify, for example, has no outpost in the region, despite taking a large slice of funding from the Moscow investment group Digital Sky Technologies.

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Announcing its latest financial results, the Moscow-based company said that it beat expectations to post $200 million of revenues, with net income for the first quarter of 2012 up to 1.26 billion rubles ($43 million). That’s 53 percent higher than the same time last year, continuing the company’s growth curve.

But some had already worried that profits were down significantly on the end of 2012, where profit was more than $71 million. And, more importantly, Yandex is slowly losing market share in Russia to Google — with the percentage of searches on Yandex down to 59 percent. A year ago it was riding high at 65 percent.

And that’s had an impact on the company’s stock since it went public last year.

In a call to media and analysts, CEO Arkady Volozh said the drop from the end of last year was largely down to the seasonal trend for a depressed advertising market, and that the company was doing well in lots of new regions as well as remaining strong at home.

“There is still a lot of room for growth,” he said, both in Russia and in other territories — despite the massive growth of Google’s Chrome browser, which gives its Californian rival a leg up in search volumes.

“We sustained the market share and we’re still in the ballpark of 60 percent share, despite serious changes on the distribution front and complete change on the browser front,” said Volozh. “We grew faster than analysts expected last year and we continue to grow faster this year than expected. Finally, our Turkey launch will take a lot of time and effort, but the early results actually encourage us a lot.”

As it looks to boost growth, Yandex has been developing new products — a real-time search partnership with Twitter, for example, and map licensing from Navteq. It’s also broadening its base by moving into the Turkish market, and putting money into seed investment projects.

The markets reacted slowly, however, and as the exchanges opened in New York, the company’s shares were relatively flat.

In part, that’s a settling of sentiment about the company after its public flotation last year, which ended up being one of 2011′s biggest tech IPOs.

But it’s also a recognition of Google’s slow but growing influence in the Russian market. Now responsible for more than a quarter of local searches, Google is — of course — a behemoth compared to Yandex. But as time goes on, many worry that the Mountain View company could bring its considerable financial power to bear on Europe’s biggest internet market.

And given that in the last three months Google made as much profit in 36 hours as Yandex made in the entire quarter, there may be plenty of reason to worry.

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The deal gives Yandex access to Twitter’s firehose, and allows users to search it at twitter.yandex.ru, giving them almost instant access to vast troves of data streaming off the messaging service.

The move comes just hours after the Moscow-based service launched a program to incorporate more social networking data into its search results.

And it also comes after Google, which trails Yandex in the Russian market, famously ended its own deal with Twitter — a move that killed off its own real-time search product.

That decision was just one part of an ongoing spat between the two companies, but it appears that Yandex wants to try and take advantage of the situation to further extend its lead over Google in its home market. Currently Yandex is responsible for around 60 percent of Russian searches, but its rival recently stole a few points and moved up to control around a quarter of the market.

Although the terms of the deal aren’t known, it’s likely that Yandex is paying a substantial fee to access Twitter’s data: Microsoft is thought to pay around $30 million each year for the firehose.

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In an announcement this morning, Ozon said it was making the deal in order to build a “powerhouse” that could become the dominant force in Russian e-commerce, with CEO Maelle Gavet stating that the two companies were “a strong fit” that could combine to become “the absolute leader” in their category.

Terms of the deal have not been announced, but the major talking point may actually be the speed at which Sapato went from launch to acquisition target.

The company, which has aped the model built by Zappos, was only spun out of Moscow incubator Fast Lane Ventures last year. However, even in that short period, Sapato quickly established itself as one of the biggest noises in the fast-growing Russian market, with more than 2.5 million users — a figure that expansion-hungry Ozon could not resist.

The deal marks Ozon’s first major move since it received a huge $100 million round of funding from a range of investors including Index, ru-net and Japanese web retailers Rakuten. And although the terms of the dea were not disclosed, there is little doubt that Sapato is a substantial purchase — having raised $20 million itself over the last year.

That could mean that the return is only moderate for Sapato’s investors — which include Intel’s venture capital arm — but will surely count as the first major coup for Fast Lane which, while not an outright clone factory, specializes in taking established online business models from elsewhere and building out new services for the Russian market. The group launched 15 sites in the past two years, but selling Sapato may be seen as a watershed.

That captures the sense of opportunity in the former Soviet nation, with a rapidly-growing user base that is now the single largest Internet market in Europe and yet still has plenty of room to expand. Big names like Mail.ru and Yandex have already cashed in with IPOs, and investors see lots of chances to make a killing.

In a broader sense for Ozon, moving into fashion, shoes and accessories certainly adds yet another string to its bow. The site started out selling books, DVDs, and electronics, but in the last year or so it has been expanding by adding a travel site and building out a sophisticated logistics operation.

There’s no small irony that the move echoes Amazon’s purchase of Zappos in 2009 — history seems to be repeating itself — but there’s very little chance that Ozon will stop there.

In an interview back in September, Gavet told me how she wanted to expand the company and turn it into a billion-dollar company, and said that acquisitions were a crucial part of that strategy. It seems there may yet be more to come.

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The news comes at the same time that another big Russian internet property, Digital Sky Technology’s free mail provider Mail.ru, is also releasing a product it hopes will increase its use among mobile consumers in the country: it has partnered with Nokia (NYSE: NOK) to develop a new web browser for Nokia’s S40 feature phones, which remain some of the most popular in the country.

The Yandex deal will see the company launch an iPhone app by the end of this year, with an app optimised or for the iPad tablet in 2012. The news was first reported by the Russian financial newspaper Vedomosti, which cited company spokesperson Ochir Mandzhikov for the launch dates.

Yandex has some 10 apps already published for Apple (NSDQ: AAPL) devices — covering maps, navigation and mail — but this will be the first one dedicated to search, the company’s bread and butter from a revenue perspective, where (like Google (NSDQ: GOOG), China’s Baidu (NSDQ: BIDU) and other search portals) it runs advertising alongside search results. The app will also give users quick access to other Yandex services such as weather and exchange rates.

Meanwhile, Mail.ru is launching a new web browser for S40 feature phones, which remain some of the most popular in Russia today. In collaboration with Nokia, Mail.ru is integrating a number of its services, such as e-mail, news and social networking, into a browser that it says is specially optimized for smaller screens and lower bandwidth use (some of these devices, for example, will not even necessarily have 3G capabilities, or processors to handle heavy data files from the Internet).

What’s interesting about the S40 deal is that these were all the kinds of services that Nokia in the past had tried to develop itself, but is now conceding to other companies that are either stronger players in these areas technologically, that already have strong local presences (mail.ru is the biggest of the free mail providers in Russia today) — or ideally both.

Nokia’s Russia director, Alexander Kopanev, notes that the deal with mail.ru is a first for Nokia in Russia — and it will be interesting to see if Nokia tries to replicate the relationship with other local search giants in other markets, or whether it tries to work with other properties in the DST umbrella (the company is also a shareholder of Facebook, among other holdings).

For Yandex, the move into iOS search apps represents a significant step forward on the platform, where it has so far not gotten very far with discussions with Apple to preload the service on to devices sold in Russia. It has inked some other key deals to preload its services: with Samsung for its connected TVs and bada phones, as well as with Microsoft (NSDQ: MSFT) for its Windows phones distributed in the market. It also had an existing agreement with Nokia for its Symbian handsets.

The Vedomosti article notes that while Yandex is still the biggest search engine in Russia, the rise of Android devices and other smartphones have put something of a dent in its market share. That’s because the Android devices default to Google’s search services, while on iOS devices Google is the default search on Safari, Apple’s own default web browser.

Google’s Android currently accounts for 27 percent of all mobile devices sold in Russia — a three-fold rise over the last year — while Apple’s share is now five percent (from one percent a year ago). Yandex’s share of the search market is 60.8 percent, a decline of 3.6 percentage points. Google’s has gone up by almost the same amount, 3.5 percent, to a total of 25.4 percent of the market.

Mail.ru, on the other hand, appears to be making more of a play not for the platforms that may dominate more in the future, but for the ones that are strongest today. Nokia currently sells some 27 models of devices built on its S40 platform, which makes it the most popular platform for what is still the biggest mobile device vendor in the Russia.

The new Mail.ru-optimized browser is available for download by existing users, and will presumably be bundled into new devices that will be sold in the future.

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