Yandex sells Russian businesses, leaving the country with its best technology

After Moscow invaded Ukraine, the ‘Google of Russia’ decided it couldn’t stay in Russia

Moscow-based Yandex, the country’s dominant search engine founded by two Russian entrepreneurs, is hoping to transfer its most promising new technologies abroad and eliminate most of its operations. doing business in Russia to avoid the effects of Western sanctions after President Vladimir Putin ordered Russia to intervene in Ukraine.

According to the plan, which the Financial Times reported on Thursday, Yandex NV—the holding company of Yandex registered in the Netherlands—will sell most of its Russian businesses, such as search, e-commerce and ride-hailing, to a local buyer. The New York Times then reported that Yandex NV would then move its most promising technologies to markets outside of Russia.

By severing ties with Russia, Yandex hopes to protect its newer businesses, such as self-driving cars, cloud computing and educational technology, from being connected to the market. Russia. Western partners canceled cooperation with Yandex after Russia’s war in Ukraine, including food delivery company Grubhub, the company finished Their robot delivery initiative with Yandex a few days after the invasion of Russia. New export controls also restrict sales of technologically advanced components to Russia.

There are roadblocks to Yandex’s plan. It will need to find a local buyer willing to buy its Russian businesses. It will also need Moscow’s permission to move the technology license outside the country, and Yandex shareholders will need to agree to the plan.

The plan is said to be supported by Aleksei Kudrin, a former Russian finance minister. Kudrin is expected to take over a leadership position at Yandex once the deal is complete, according to Financial Times.

Yandex did not immediately respond to a request for comment.

Sanctions and an employee 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 not state-owned, Yandex has built a close relationship with the Russian government. Yandex in 2019 agreed to give the state a greater say in its operational decisions to prevent laws restricting foreign ownership of Russian technology companies.

The NASDAQ The stock exchange suspended trading in Yandex shares shortly after the Russian invasion due to concerns about US sanctions. Shares of Yandex in Moscow are down 60.3% since the start of the year. Shares tumbled despite Yandex’s strong performance in the Russian market, with revenue up 46 percent in the third quarter year-over-year.

The Russian technology company has also been affected by the exodus of talented Russians from the country following the invasion of Ukraine. More than 10% of Yandex’s 19,000 employees have left, reports Bloomberg in August.

The European Union has also targeted Yandex executives with sanctions, accusing the company of promoting pro-war Russian propaganda on its news platform. European Union penalize 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 supporting “materially or financially” the Russian invasion. Volozh resignation as CEO on the same day. Yandex sold its news division for Russian technology company VK in August.

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