Yandex Revenue Surges to $420 Million in 2010

Yandex, the dominating search engine on the Russian market, boasts record revenue for 2010. This while it's already significant market share continues to grow. The company made no mention of profitability, but Yandex is planning a possible 2011 initial public offering.

Revenue increased 43 percent in the last year, reaching 12.5 billion rubles, or $420 million, according to US GAAP standards.

The numbers don't include traffic acquisition fees, the money it pays partners for the ads they carry.

"The highlight of 2010, as we see it, is that by constantly improving our product quality we managed to increase our share in the search market," Yandex CEO Arkady Volozh wrote.

"The considerable revenue increase we report this year reflects two important trends - a post-crisis revival of the small and medium-sized businesses and a shift in advertising expenditures from other channels towards online advertising," he added.

Contextual advertising, the ads that served by Yandex's ad network to third-party ads accounted for 88 percent of revenue, up from just 45 percent in 2009. There were also 40 percent more advertisers using Yandex, 180,000 in total.

In terms of market share, Yandex says it controls 64.1 percent of Russian searches, according to third party analytics firms. This is up from 58.9 percent in December 2009.

In other Russian-speaking countries, its market share is also on the rise, though it's not dominating there as well. Yandex had a 27 percent cut of the Ukrainian search market, up from 20.8 percent, and 24.4 percent in Kazakhstan.

Yandex has managed to dominate its local market, one of the few search engines to win the battle with Google. In fact, Russia is one of the very few countries where Google is not the top search engine. Other notable exceptions are South Korea, Japan, in a way, and or course China, where it has been losing ground.