Russian search giant Yandex has finalized the sale of two of its major media assets to local rival VK, the owner of the social network of the same name.
The deal to sell the products, Yandex’s algorithmically sorted news aggregator (News) and blogging recommendation platform (Zen), was signed back in April. But today’s binding agreement goes even further – including the sale of the main page, Yandex.ru, which integrates news and Zen content into the search page, making it information-rich (critics say Disrupt- rich) portal. Featuring multiple infinite-scroll content feeds.
This means that, once the sale is complete, visitors browsing on Yandex.ru will be redirected to a new version of the page, dzen.ru – designed by VK, the upcoming owner of two of Yandex’s media products controlled and developed.
We also understand that the VK version of the Yandex.ru portal will still have Yandex’s search service – but as a standard iframe integration (which means it will not get access to search data). So the only immediately obvious sign of a change of ownership for regular users of Yandex.ru will be the redirected URL.
As we reported in June, Yandex is signaling an imminent shift of focus to an alternative local homepage, ya.ru – a bare-bones search portal with a dense Yandex.ru page for decades, where News content dominates the experience. , The latter portal has, increasingly, become a major reputational headache for a business that likes to claim it’s just a neutral tech firm so you can’t get enough of the allure of switching to a plain, search-focused homepage for Yandex. be able to see
“Yandex’s board and management have concluded that the interests of the company’s shareholders, including Class A shareholders, are best served by pursuing a strategic exit from its media business (other than streaming entertainment) and focusing on other technologies and services.” service providers, including search, advertising, online-to-offline transactional businesses and many b2b technology businesses,” the company wrote in a press release today.
“The board of directors has approved the transaction. In line with this strategic focus, ya.ru will become the main page of Yandex and the main entry point into search, mail and other non-media services,” it added – along with the main service for the new main page and Alice for a new Android The application, which focuses on its AI assistive technology, called Yandex, will be its search engine.
“Upon completion of the transaction, the current main application of Yandex for Android will change its name to Yandex Start. It will then act as a browser and users will be able to select the start page in their settings. Yandex for iOS The app will continue to work as before but without Zen and News.
“After the completion of the transaction, the current main page with News & Zen will be renamed to dzen.ru and will be further developed and controlled by VK (including control over the look and feel, content, etc.). Related news and Zen brands and technologies will also be transferred to VK. ,
A source close to the matter told Meczyki that the sale of content services has become a “strategic priority” for Yandex since the start of the war in Ukraine, which has led to a sharp increase in censorship by the Russian state. “It has become very difficult to remain independent in the presence of services like News and Zen,” he suggested.
Yandex has faced sharp criticism over the role of its platforms in spreading and amplifying state propaganda from the likes of jailed Kremlin critic Alexei Navalny – who, in a public attack Earlier this year, it accused the company of “a solid brazen lie” of claiming to display ‘news’ on its homepage.
Several senior Yandex execs have also been approved by the European Union – although the company has so far avoided formal approval.
Whether the Kremlin’s selling of two main online content, through a regime of tightening media licensing and regulation, is able to be appropriate to increase state propaganda, demanding a reboot of Yandex’s reputation remains to be seen.
The media exit appears to cost more – as it essentially loses the ability to use its own trademarked brand name locally by handing over control of the Russian portal (and all traffic generated from it) to Kremlin-linked rival VK. Which only looks set to deepen the state’s takeover of the digital information-sector in the country.
In return, Yandex is receiving 100% of the VK-owned food delivery service Delivery Club “as the sole consideration for these assets”, as stated in its press release – confirming that from the transaction There is no monetary payment attached. (And on-demand delivery is hardly a poster-child for its post-pandemic success, with a global economic slowdown and dwindling consumer demand as inflationary pressures impact food delivery platforms.)
“Delivery Club, the leading food and grocery delivery service in Russia, will become part of Yandex’s ecommerce, mobility and delivery segments,” Yandex said. “After the completion of the transaction, users will be able to continue using both the Yandex Eats and Delivery Club app, while couriers working with Delivery Club will join the Yandex Pro technical platform. Yandex Delivery Club wants to maintain the brand .
The sale of Yandex’s media assets still requires regulatory approval to be completed – the company noted that it is subject to anti-monopoly approval in Russia, but added that the transaction will close in “the coming months”. expects.
“We couldn’t get rid of News and Zen in any other way,” our source close to the matter told us, suggesting that Yandex’s options are limited in the need for the Kremlin to approve major business changes.
Back in 2019The Russian firm agreed to a corporate restructuring that increased Kremlin control over the business by giving a body with close government ties a veto over the company’s key decisions (including IP).
“It was the only way to really focus on technology. We have a lot of people working at Yandex. We didn’t want the company to shut down,” the source said. “It was very difficult for us to make this decision but There was no other way to manage it.”
Earlier this year, in an interview with Meczyki, former deputy CTO of Yandex, Grigory Bakunov, told us that the company’s leadership was inexperienced to risk a Kremlin takeover of the algorithm-driven content-sorting technologies they were developing. Were – and its execution was previously passed legislation, through a combination of regulation/licensing and by installing state supporters on Yandex’s board, to actively discontinue products enabled by the state to ‘virtually acquire’ by 2017 (with the passage of a law requiring only news aggregators to use state-approved sites as news sources).
The strange prospect of a local Internet giant passing its own brand-named search portal – and all the traffic it attracts – to a rival, is the latest ‘through-the-looking-looking-from-the-kremlin’ move to the Russian Internet since the Kremlin. Glass’ moment. Decide to attack your neighbor. In another example earlier this summer, Yandex opted to erase national borders from its Maps app to bypass political pressure where the software was drawing borders.
Strict Kremlin regulation of search services inside Russia could bring yet more such painful passes for Yandex.