Tech Meets Geo-Tech: Russia’s Search Giant Yandex Takes $1M, 25% Stake In Seismotech

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Yandex may be seen as the anti-Google by pursuing a strategy for growing its search-portal business in Russia and adjacent countries rather than aggressively expanding worldwide, but it is using another route to extend its reach: through investments. Today it confirmed that it has taken a strategic, 25 percent stake in Seimotech, a Russian geophysical exploration company, for $1 million.

This represents the first investment of its kind for Yandex, which has otherwise limited its funding activities to tech companies in areas like e-commerce and new technology. (It was one of the early backers of Face.com, the facial recognition company that this week officially got bought by Facebook.) At heart, it is a strategic, big-data play: as part of the deal, Yandex says it will be providing computing resources and proprietary technologies for Seimotech to use in its analysis mapping seismic data for purposes like oil and gas exploration.

“This is definitely an experiment in the sense that we are applying a technology behind our key product (search) on an entirely different field,” a Yandex spokesperson told me. “Search remains our core business.” He added that if it works out, there will be more investments of this kind: “We are potentially ready to discover other opportunities to apply our knowledge and experience in distributed computing, a technology we use in our core product.”

The technology that Yandex is providing is around the area of distributed computing technology, allowing Seismotech to process data across potentially thousands of servers, and underscores the trend of how big data plays are extending into other verticals.

“The IT industry has been the major consumer of computing power in recent years. It’s no wonder that the latest, most efficient data processing technologies have been developed exactly in this sphere. At the same time, there are other computing-intensive domains – geophysics being a classical example. Parallel computing technologies we have been using in internet search can now power seismic exploration,” says Arkady Volozh, CEO of Yandex, who broke the news earlier today on stage at St. Petersburg International Economic Forum.

It is also a sign of how those who have traditionally focused investments on technology are extending further into other areas. Coincidentally, at a panel discussion earlier this week at LeWeb in London, three top tech investors, Kevin Rose, Chad Hurley and Niklas Zennstrom, all said that while non-tech areas (space exploration was the one raised on that day) were interesting, they were not focused on investing in them at the moment.

By virtue of this deal, Yandex says that Seismotech becomes one of the biggest seismic data processing businesses. It already has large oil companies like Norway’s Statoil and Russia’s Lukoil as clients, and the ambition is to go further internationally.

“Computing resources and technologies provided to us by Yandex will considerably increase our processing capacities and will give us an opportunity to take our services to another level. What used to take us a few months to calculate will now be done in a matter of hours. This is something that puts us in an excellent position for developing new services for geophysical exploration and offering them to our clients,” says Dmitry Mosyakov, СEO of Seismotech, in a statement.

This may be a first-time investment experiment for Yandex, but it’s not the first connection between the company and geo-science: both Volozh and his co-founder Ilya Segalovich (now the CTO) are sons of geologists, and Volozh himself has a mathematics degree from the Gubkin Institute of Oil and Gas.

[Image: SioW, Flickr]