"Yandex" will meet the high expectations of investors

Yandex N.V. - Registered in the Netherlands, the head of the holding structure, the manager of Russia's leading search engine and web portal. Last year, the share of "Yandex" accounted for about 64% of the country of search traffic in the January-March of 2011 - 65%. In March, in its pages visited by 38.3 million unique visitors. "Yandex" uses its search algorithms, and applies the technology to produce results, depending on the geographical location of this person. The company supports many more - information, navigation and personal - services such as "News", "Market", "Mail" and "Maps". Russian offices of "Yandex" in Moscow, St. Petersburg, Ekaterinburg, Novosibirsk, Kazan and Rostov-on-Don. Foreign representative offices are opened in Kiev, Odessa, Simferopol, as well as in Silicon Valley in California. The company owns Russia's largest fleet of servers located independently from offices in several data centers and connected to their own channels of communication. Basic earnings "Yandex" from the sale of contextual text ads, that is, ads that are shown to users, along with answers to their queries. The automatic placement of advertising "Yandex" capable of displaying blocks of text, not only in the pages of the search engine, but also on other sites - of the network. The number of advertisers that system in the first quarter exceeded 127 thousand smaller share of revenue, "Yandex" bring shows online media advertising. In 2000, the consolidation of business on the basis of OOO "Yandex". Then the proportion of 35.7% in exchange for $ 5.3 million investment has the structure of Ru-Net Holdings, created by Baring Vostok Capital Partners, United Financial Group and several private investors. Major owners of "Yandex" remain its founders, including CEO Arkady Volozh. In 2002, the company first appeared on the return, and next year it paid its first-ever dividend of the Russian Internet. In 2007, "Yandex" has become a social network of "My Circle" and became the sole owner of the service "Yandex". In 2008, the purchased "SMIlink" (now - Analytical Centre "Yandex") and online advertising agency "Mediaselling." At the same time shareholders Yandex NV, which became the core group agreed on the division of shares into two classes: A - one vote, B - ten. At the time of separation of all the owners of "Yandex" become equity holders of Class B, which in the case of the sale will automatically change to class A. By this time, about 60% of "Yandex" belonged to various investment funds. In September 2009, Yandex N.V. additionally released one priority share. This paper allows the owner to veto the concentration in the hands of one package of over 25%. Priority action on the par value of one euro was transferred to Sberbank. Preparing for the IPO «Yandex" began even before the crisis, but only now reached the goal. At the first stage of the shareholders and the company sold 52.2 million shares of Class A $ 919 million and $ 385 million, respectively. Next, investment banks - the organizers have decided to use an option deal to acquire as many as 5.2 million shares, and the final IPO volume reached $ 1.43 billion, and free-float - 17,6%. Growth factors 1. The demand for online advertising Russian advertisers increasingly prefer online resources. Thus, according to the RACA, in the first quarter, spending on advertising reached 54 billion rubles (excluding VAT) increased during the year by 28%. Internet segment showed an increase immediately by 60% to about 7.1 billion rubles. And out of which about 5 billion accounts for contextual advertising market, which controls the lion's share "Yandex". 2. At the hour of triumph dotcom stock exchanges remains of great interest to Internet companies. This is well illustrated by the latest Russian IPO. At a time when many companies from other industries canceled the deal, the November placement Mail.ru and the current "Yandex" passed with huge demand. And let the observers compare the current dot-com bubble of euphoria in the early 2000s, quotes "Yandex" providing support at least in the near future. 3. The potential new services at this stage only a few of the services of "Yandex" generate cash flow. In the future, the company can increase revenue from advertising impressions, not only in search results, but also on its other portals. In comparison with Mail.ru, which is considered as an alternative investment in the Russian Internet sector, and also develops a set of new services, the "Yandex" a clear business model. Factors reducing 1. A very high rating on the stock exchange demand for shares Yandex NV in the IPO repeatedly exceeded the supply. Not surprisingly, the company revised its initial price range, raising the bar with a $ 22-23 to $ 24-25 per share, that is considerably higher than the mark, which it regarded as fair. After closing the books submitted (at the upper boundary of the new range) is not hype has died down. On the first trading session quotes soared by half. 2. Stiff competition The most dangerous rival in Internet search company said Google, which has developed a Russian-language interface in 2001, but began promoting close services in Russia only in 2006. "Yandex" has used the first half of the time, edging out Russian competitors. But in recent years, Google has managed to attract the sympathy of many users. 3. The slowdown in the development of some observers tipped "Yandex" slowdown, and compare it with the Chinese Internet companies, in particular search engine Baidu, which are traded on exchanges with comparable coefficients. In China, the level of internet penetration is lower than in Russia, and the capacity of the advertising market, by contrast, above. And, accordingly, there is a dot-com remains the greatest potential of organic business development.