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Russian search leader Yandex showed the Nasdaq a strong set of results in its first ever report as a public company – and committed to heavy investment in its product lineup.
Q2 profit rose 11 percent from last year to RUR 1.1 billion ($40.1 million), on 57 percent higher revenue of RUR 4.5 billion ($161.7 million).
And Yandex is also expecting to turn in 55-60 percent revenue growth for the full year, after committing to invest RUR 6.3 billion in capital expenditure ($227.9 million) this year.
Yandex’s profit rose despite heavy investment in adding more staff – in particular, forming marketing and HR teams.
“This second quarter has been all about investing in growth and attracting new talent,” CEO Arkady Volozh told investment analysts on his debut earnings call. But Volozh plans to slow down on this investment next year.
It enjoys a 60+ percent search share leadership in Russia, with Google (NSDQ: GOOG) on only 20+ percent. Yandex advertiser count has grown by 39 percent since last year.
The majority of its money from text-based ads and recently signed a deal to provide search and ads for rival Rambler. This will be apparent on Yandex’s next quarterly disclosure.
Yandex shares actually tanked on the earnings report before returning to sit 6.49 percent down by mid-morning.
The Russian search market is this week embroiled in controversy after sensitive data like text messages, government documents and sales receipts from online sex shops turned up in search results. “The search engines did their job and made the documents available on the public internet,” Volozh told analysts. “Webmasters are sometimes doing very silly mistakes.”
Eighty stores are being investigated for not safeguarding customer data from crawlers, WSJ reports, but Yandex told investment analysts it expects no new regulations on Russian search engines.