More news from Yandex, Russia’s biggest search engine, that highlights the opportunity for more growth in digital in Russia and adjacent markets. One day after announcing a new real-time search partnership with Twitter, the company is reporting Q4 earnings: sales were at $200 million with net income of $71.3 million, both representing growth respectively of 56 percent and 51 percent on the same quarter a year ago.
But although Yandex says the figures were at the high end of its guidance, revenues fell short of average analyst expectations of $207.6 million, as polled by Yahoo Finance.
Yandex noted that its share of the Russian search market is now at 60.8 percent, according to LiveInternet. That still makes it the biggest search portal in Russia, although this represents a decline over last quarter, when the company reported a 62.7 percent share of the market.
That underscores Yandex’s move to search for new platforms and mediums, and markets, to serve ads.
Those include services like adding Twitter’s real-time search. But also, like its rival Google, Yandex is putting a lot of effort into its mobile business, and has in the last several months inked search deals with Samsung for its bada devices and Microsoft for Windows Phone — where Yandex will now become the default search window for the CIS and Russia, respectively.
It has also bought its own mobile developer, SPB Software, for a price believed to be around $38 million. SPB has developed mobile payment services, games, and other mobile apps. It’s probably a big leap to think that Yandex will go the whole hog and look at making its own mobile OS, as Google has done with Android (although never discount the possibility). But in any case, SPB already works in enough areas where Yandex could potentially insert ads and power other functions, for its own services and those for third parties.
The company is also expanding outside of its traditional base of Russia and the CIS: it has launched new services like maps in Turkey, where it is currently making a big push.
While those efforts have yet to bear significant fruit for Yandex — at least not enough worth mentioning in today’s results — the company continues to see growth in its existing online advertising business:
Search engine result pages were up 36 percent from last year; and advertisers now number 173,000 – a 43 percent increase over last year – and 10 percent up on Q3. For the full year, advertisers were up by 44 percent to 270,000. The bulk of Yandex’s ad revenues are coming from its own search-based text ads, which account for 68 percent of Yandex’s revenues. But just in terms of actual growth, revenues from third-party sites actually saw bigger gains last quarter. Text based ads altogether accounted for over 80 percent of Yandex’s revenues:
Yandex said it expects that overall, Ruble-based revenue growth for 2012 will be in the range of 40-45 percent.