On a day marked by some tragedy, the Russian search giant Yandex posted Q2 earnings today of $281 million (9.2 billion Russian roubles), up 35% on a year ago and just beating analyst estimates 9.1 billion roubles. Adjusted net income, meanwhile, was up 48% to $92 million. On the strength of its current business, the company also said it was raising its full-year guidance to revenue growth of between 34% and 38% for 2013.
Like Google, Yandex makes the lion’s share of its revenues from advertising around its search products. Like overall sales, this grew 35% to $274 million. Yandex says that text-based advertising revenues accounted for 88% of its overall revenues in the quarter, with 73% of that on its own sites and the rest through its ad network.
Yandex’s position in search is still Russia’s largest — 61.7%, as reported by Yandex today, a slight increase on last quarter — but it is always facing competition from the likes of Google, which is partly growing on the strength of its Android smartphone and tablet OS and the subsequent drive of more users to its browser and search engine.
It is for reasons like this that Yandex is getting more enterprising about how it extends its own search business, and moves into other products like mobile, mapping and cloud services.
Today, the company quietly noted that it is now powering paid search services for Mail.ru — which looks like it is the unnamed company powering Mail.ru’s decision to drop Google for its own solution back in July. This makes Mail.ru one of the bigger partners in Yandex’s ad network. It will be worth watching to see how much that will impact sales in that category going forward. As it is, text-based advertising revenues from Yandex’s ad network were $42 million — growing 25% over last year and contributing 15% of total revenues during Q2 2013. “Revenues from Yandex websites grew faster than those from our ad network as we implemented changes to our advertising technologies on our owned and operated sites,” the company says.
As for other products, the company this month completed the merger of Yandex.Money, its internet payment system (think PayPal or other digital wallets), with Sberbank, which now owns 75% of that operation. This wasn’t actually a very big business for the company — even if it is one of the bigger payment providers in the country. Yandex today noted that online payment commissions accounted for only 2% of revenues during Q2 2013, although that grew 57% compared with Q2 2012.