Yandex will sell Russian companies and flee the country with its best technology

After Moscow invaded Ukraine, the “Russian Google” decided that it could not stay in Russia.

Moscow-headquartered Yandex, the country’s main search engine founded by two Russian entrepreneurs, hopes to transfer its most promising new technologies abroad and abandon most of its Russian business to avoid the effects of imposed Western sanctions. after President Vladimir Putin ordered Russia to go to Ukraine.

As part of the plan, that the FinancialTimes reported on Thursday that Yandex NV, the holding company of Yandex registered in the Netherlands, would sell most of its Russian business, such as search, e-commerce and ride-sharing, to a local buyer. The New York Times later reported that Yandex NV would then move its most promising 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, from being plugged into the Russian market. Western partners called off tie-ups with Yandex after Russia’s war in Ukraine, including food delivery company Grubhub, which ended its robot delivery initiative with Yandex a few days after the invasion of Russia. New export controls also limit the sale of high-tech components to Russia.

There are obstacles to Yandex’s plan. He would have to find a local buyer willing to buy his Russian companies. Moscow would also need permission to transfer technology licenses outside the country, and Yandex shareholders would have to agree to the plan.

The plan is said to be backed by Aleksei Kudrin, Russia’s former finance minister. Kudrin is expected to take a leadership position at Yandex once the deal closes, according to the FinancialTimes.

Yandex did not immediately respond to a request for comment.

Sanctions and staff exodus

Yandex, founded in 2000, controls around 60% of Russia’s search engine market and has invested in carpooling, e-commerce and news.

Although not state-owned, Yandex has built a close relationship with the Russian government. Yandex in 2019 agreed give the state greater influence over its operational decisions in a bid to stave off legislation limiting foreign ownership of Russian tech companies.

The NASDAQ The exchange suspended trading in Yandex shares shortly after the Russian invasion due to concerns over US sanctions. Shares of Yandex in Moscow have fallen 60.3% since the start 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.

The Russian tech company has also been affected by the exodus of talented Russians leaving the country after 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. EU sanctioned Tigran Khudaverdyan, deputy general manager of Yandex, who was 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 Russian technology company VK in August.

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