Businessmodel of Yandex

Customer Segments

Yandex operates the most popular internet portal in Russia, where it serves more than 53 million users. The Company is also reported to controls 57% of the country’s internet search market, as of July 2015.

While Russia is by far Yandex’s largest, accounting for almost 90% of the web traffic driven through its homepage, it also serves customers in Ukraine, Belarus, Kazakhstan and Turkey.

The Company’s homepage, search engine and news portal serve general consumers and internet users, with more targeted portals serving a more distinct audience. This includes its AppMetrica analytics service, which caters to website owners and businesses, and its Yandex Realty portal, which serves those wishing to buy or sell property.

Yandex also provides advertising services to brand marketers and advertising agencies.

Value Propositions

Yandex’s main value to consumers is that its flagship search, email, news and video streaming services are available free of charge. The Company provides a range of products and services to customers, enabling them to integrate their accounts and preferences across multiple channels. Yandex is a market leader in its native Russia and has a reputation as a reliable and innovative service provider.

For advertisers, Yandex’s network portfolio of services and internet portals and large customer following provides significant opportunities to expand brand reach and advertising audiences.

Channels

Yandex platform can be accessed through the Company’s homepage at www.yandex.com, which links to separate portals for its various services.

The Company also provides a range of mobile apps, available on iOS and Android, covering its portfolio of services, including Yandex Browser, Yandex Mail, Yandex Navigator and Yandex Maps. The Company can also be contacted directly over the phone in relation to advertising enquiries.

Customer Relationships

Yandex’s services are predominantly self-service, requiring no interaction with Yandex representatives. Users are able to utilise many of Yandex’s services without registration – including its search engine, news portal and translation service – and can sign up for various other services via the Yandex homepage.

Advertisers and brand marketers, in contrast, must contact Yandex directly over the phone to discuss terms, receiving a more personalised and tailored service. Yandex provides support to its customers through help and technical assistance guides available through its individual service portals, and provides contact details for its offices on its main corporate website.

The Company also interacts with its customers through social media accounts, including with Facebook and Twitter.

Key Activities

Yandex is a multi-functional Russian internet and technology company, providing internet search, communication and digital content services to users. It operates the largest search engine in Russia, as well as online portals for email, news, finance, real estate, music, photo sharing, blogging, and video streaming, all of which are accessible through the Yandex homepage.

The Company also provides various search, display, video and audio advertising solutions across its online portfolio, which account for the majority of its annual revenue.

Key Partners

Yandex operates a network of search partners, advertising partners, development partners and analytics partners. The Company collaborates with a number of websites as part of its Yandex Advertising Network, through which it places contextual advertisements and media banners, with partners rewarded for driving traffic.

Yandex partners with various tech companies as part of its search service. The Company has collaborated with Facebook, ensuring that public content from the social media site is included in searches made through the Yandex engine, with Facebook proving the Company with access to its full firehose of data. Yandex has a similar arrangement with local Facebook clone Vkontakte. Additionally, Yandex has partnered with Mozilla Firefox to be the browser’s default search engine in Russia and provides information for searches made through the DuckDuckGo engine.

Yandex Data Factory, the Company’s machine learning and data analytics arm, partners with companies from a range of sectors. It has a partnership with Intel, for which it big data collection and analytics technology; a strategic alliance with pharmaceutical company AstraZeneca, working with scientific data; and a partnership with international consulting company Accenture, providing computing power to its research and development projects in Russia.

Key Resources

Yandex’s key resources are its technology and internet portals, its IT infrastructure, its personnel and its strategic partnerships. The Company has a number of patents filed with the US Patent and Trademark Office, through its Switzerland-based subsidiary Yandex Europe AG.

This includes applications entitled ‘Display screen or portion thereof with a graphical user interface showing an image search engine results page’, ‘Display screen with graphical user interface’ and ‘Method for displaying a position on a map’.

Cost Structure

Yandex incurs costs through the development of its web portals, the maintenance of its IT infrastructure, the retention of its personnel. Yandex also has a large marketing and advertising budget.

The Company employs a large, international workforce of more than 5,400 personnel, accruing significant costs relating salaries and benefits.

It also has a network of offices across Russia, Ukraine, Belarus, Turkey, Germany and Switzerland which generate rental and utility costs.

Revenue Streams

In 2015 Yandex recorded an annual revenue of RUB 59.8 billion (approximately $820.4 million). The Company’s principal revenue stream is advertising. Its advertising revenue in 2015 was RUB 58.2 billion, accounting for more than 97% of the Company’s total revenue for the year.

Yandex provides a range of advertising solutions, including search advertising on its Yandex Direct and Yandex Market portals, and display, audio and video advertising across its news, travel, finance, weather, jobs and realty pages. Advertising solutions are priced on a cost per impression or cost per thousand impressions basis, varying in price depending on the type and location of the advertisement, with search advertising costing 30 kopecks per impression and display advertising on the Yandex homepage priced at RUB 180 per thousand impressions.