Yet Another Indexer? July 2010

Transcription

1 Yet Another Indexer? July 2010

2 Company Highlights Russian Internet Market Yandex Advertising Engine Western Business Development Initiatives 2

3 Yandex Highlights Yandex at a Glance The largest internet search engine in Russia Russia s #1 search engine 64.0% market share in search 1 Over 10 Bn web pages indexed Leading Russian tech company Almost 20 years of development World-class in-house R&D team Culture rooted in innovation, creativity and the exchange of ideas Leading Internet destination in Russia 10.8 Bn page views per month Bn search results pages per month 3 Track record in monetization and profitability FY 2009 gross revenue - US$ 278M Up 14% over 2008 y/y 41% EBITDA margin Sources: 1. LiveInternet.ru (May, 2010) 2. Yandex logs (May 2010) 3. Yandex Logs (April 2010) 3

4 Yandex Highlights Yandex - Russia s Search and Information Retrieval Portal The largest and highest rated internet offerings in Russia News #1-3 Mail #2 Photo Sharing #3 Market #1 Weather #1 Traffic jams/ maps #1 Blog search #1 Money #1 4

5 Yandex Highlights Yandex mobile portal is the most visited in Russia 18 services optimized for mobile usage; apps available for Android and iphone 8.5 million unique users per month 150 million pages views per month 200 million search results pages per month Monthly Trend (Users) Advertiser Services 5

6 Yandex Highlights Company History Search technology developed and refined over almost 20 years Founding team starts developing Yandex search technology Yandex.ru website is launched Incorporation of Yandex Parallel Search Fact extraction technology in Yandex.News Launch of Yandex advertising network Search of international documents Yandex.Traffic Yandex.com Founding team joins CompTek The first contextual banner is displayed Breakeven point achieved in Q3 Proprietary anti-spam software introduced Purchase of Yandex.Money School of Data Analysis MatrixNet breakthrough search technology Yandex.Music 6

7 Yandex Highlights What makes Yandex different? Local Live, breathe and completely focus on the Runet Keen understanding of the needs and culture of Russian users as well as their diversity Leading local translation and optimization capability Breadth Reach 92% of all Internet users in Russia Access to all demographics; not just the technology elite Most Russian consumers and businesses rely on Yandex for help in making purchasing decisions Technology Focused on the complexities and nuance of Russian language search technologies for 20 years Attract and retain the best and brightest engineers; reflects Russia s native strength in applied mathematics and data analysis Innovative and leading edge development (MatrixNet, Yandex.Traffic, etc.) 7

8 Company Highlights Russian Internet Market Yandex Advertising Engine Western Business Development Initiatives 8

9 Russian Internet Market To Win in Certain Markets, Local Knowledge is Key China (2000) South Korea (1999) Search market share 1 : Baidu 64% Google 31% Proprietary Search Technology Search market share 2 : Naver 75% Google 3% Search market share 3 : Yandex 64% Google 22% + Taiwan Czech Republic Japan Sources: 1. Analysys International (May 2010) 2. KoreanClick (Dec 2008) 3. LiveInternet.ru (April 2010) 9

10 Russian Internet Market Top 10 Search Engines Yandex is 7th largest in the world and the fastest growing 10

11 Russian Internet Market Russia s Leading Search Engine Search engine traffic market share in Russia, May 2010 Rambler 2.6% Other 3.7% Mail.ru 7.6% Google 22.1% Yandex 64.0% Source: LiveInternet.ru (May 2010) 11

12 Russian Internet Market Market Share Evolution Russian search traffic market share 1 Nov 2009 MatrixNet 64% 58% May 2008 Updated core search and ranking algorithms 26% 2001 Google launches Russian language search engine Google introduces Russian language morphology-based search capabilities March 2006 Google opens office in Russia June 2008 Google launches outdoor advertising campaign 22% 8% 3% Mar-05 Sept-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Source: LiveInternet.ru (through May 31, 2010) 1. Based on monthly search traffic to Russian websites from Russian IP addresses 12

13 Russian Internet Market Top 10 Runet Sites as of April 2010 Russia, Monthly Reach (in 000) Sources: TNS Web Index Research 13

14 Russian Internet Market Internet Users Russia has 8th largest audience of Internet Users in the world Internet Users (MM) per Country Millions of Internet Users China US India Brazil Germany UK France Russia Poland Hungary Czech Sources: FOM (18+ group) for Winter 2009 for Russia, UK, France, Germany, US, Internet World Stats for Jun 2009 for Brazil; Internet World Stats (6+ age group) for Dec 2009 for China; Internet World Stats for Nov 2008 for India, Poland; Internet World Stats for Sep 2009 for Hungary, Czech Republic 14

15 Russian Internet Market Internet Penetration Russia currently has fairly low penetration compared to other large Internet populations Internet Penetration (MM) per Country 100% 76% 74% 75% 66% 69% 59% 59% 52% 50% Millions 34% 29% 37% 25% 7% 0% China US India Brazil Germany UK France Russia Poland Hungary Czech Sources: FOM (18+ group) for Winter 2009 for Russia, UK, France, Germany, US, Internet World Stats for Jun 2009 for Brazil; Internet World Stats (6+ age group) for Dec 2009 for China; Internet World Stats for Nov 2008 for India, Poland; Internet World Stats for Sep 2009 for Hungary, Czech Republic 15

16 Russian Internet Market Internet Penetration: Moscow vs. Other Regions Internet users, Fall 2009 (MM) Other Regions 1 (69%) Central, incl. Moscow (31%) Internet penetration in Russia, Fall % 48% TNS reports that over 85% of internet users in Moscow have broadband access 34% 37% 36% 32% 31% 30% Moscow Central ex-moscow North-West Far East Ural Siberia Volga South Source: FOM (18+ age group) for Fall 2009; 1. Includes Volga, North-West, South, Siberian, Ural and Far East Source: FOM (18+ age group) for Fall

17 Russian Internet Market Russian Total Advertising Market Russian Advertising Market ($MM) Sources: All data other than for online text-based advertising for based on ruble-denominated data from the Association of Communication Agencies of Russia (AKAR). Data on online text-based advertising for are provided by AIB, and include both text-based advertising and a small portion of contextually targeted display advertising. All data are reported inclusive of VAT 17

18 Russian Internet Market Russian Online Ad Market Online Ad Market Size ($MM) $800 $600 $400 $200 $0 $56 $21 $35 $708 $599 $497 $410 $356 $274 $237 $107 $130 $298 $223 $243 $47 $107 $ Text-based Display Online Ad Market as a % of Total Advertising Market 10% 9% 8% 5% 3% 1% 2% 3% 5% 6% 0% Sources: All data other than for online text-based advertising for based on ruble-denominated data from the Association of Communication Agencies of Russia (AKAR). Data on online text-based advertising for are provided by AIB, and include both text-based advertising and a small portion of contextually targeted display advertising. All data are reported inclusive of VAT 18

19 Company Highlights Russian Internet Market Yandex Advertising Engines Western Business Development Initiatives 19

20 Yandex Advert. Engines Contextual Text Ads Yandex.Direct is a Pay-Per-Click keyword-based service for placing ads on Yandex and on partner sites of the Yandex Advertising Network. 20

21 Yandex Advert. Engines Contextual Text Ad Mechanics Auction based system based primarily on CTR and Bid Placement on four types of sites: Yandex Search Partner Search (ex. Bing.ru) Yandex Advertising Network Catalogue & Market Pages Four types of targeting available: Contextual/keyword Geographic (city level) Thematic (categories of site types in network) Behavioral (based on Yandex registration information) Variety of tools available to help in campaign management Keyword suggestion, refinement & bid management Automatic bid management Budget management 21

22 Yandex Advert. Engines Ads on the Yandex Network of Partner Websites Broader audience reach for Yandex and its advertisers; enhanced monetization prospects for network partners through targeted contextual and/or search advertising Network Partners Bing, Aport & Nigma Contextual advertising Served by Yandex based on the content of the third-party website and/or the user s search history Search advertising Served by Yandex based on natural search results 22

23 Yandex Advert. Engines Yandex Catalogue of Thematic Partner Sites High quality, manually moderated Partner sites Minimum daily audience of 30k visitors per site Excludes made for advertising sites which can be prolific in Runet 23

24 Yandex Advert. Engines Yandex.Market Leading comparative shopping service Weekly audience of 2.5M unique users Over 1,500 vetted shops 24

25 Yandex Advert. Engines Yandex.Direct Tools Bid management, campaign reporting, keyword suggestions, webmaster tools and online help are all available 25

26 Yandex Advert. Engines Yandex Display Advertising Three types of display advertising are currently offered: Wide Audience ex. Yandex Home Page Most visited page on Runet (16M users per week) Top advertisers in Russia are here (Honda, Nokia, Coke, HP, etc) Affinity ex. Yandex Whats on Guide Top guide to cultural entertainment in Moscow and St Petersburg 3M unique visitors per week Contextual ex. Yandex Search Engine Broad contextual targetting Large content sites can also be targetted 26

27 Yandex Advert. Engines Wide array of high volume display advertising locations Mail, News, Travel, Money, Traffic, TV Guide, Market, Gift Cards, Maps, Weather, 404 Page... 27

28 Company Highlights Russian Internet Market Yandex Advertising Engine Western Business Development Initiatives 28

29 Bus. Dev. Initiatives Expanding Yandex s Footprint & Operations Internationally Making it easier for the English speaking world to do business with Yandex Actively expanding Yandex s presence in North America and Western Europe Developing capability to facilitate all aspects of Agencies and Customers interactions with Yandex Our initial focus is on: Improving general understanding of the Russian online ad market Educating the market about Yandex s capabilities and history Helping agencies and customers identify opportunities and facilitate media planning in Russia Providing easy access to Yandex s translation and local optimization services Westernizing payment processing & contracting 29

30 Preston Carey Business Development

31 Appendix 31

32 User Services Breadth of User Services and Category Leadership Yandex is one of the best known internet brands in Russia Core web search service #1 Yandex.Search The leading search engine in Russia Other search and information retrieval services Other services and user-generated content #1 Yandex.Maps & Traffic Maps and traffic monitoring #2 Yandex.Mail service #2 Yandex.News Aggregator of news Spamooborona Anti-spam software #1 Yandex.Market Price comparison and shopping engine MoiKrug.ru Online network for professionals #1 Yandex.Blogs Blog search tool Yandex.Fotki Photo hosting and sharing Yandex.Adresa Yellow pages and address finder Narod Website hosting platform Yandex.Auto New and used car search Utilities Yandex.Video Video search and hosting service Yandex.Bar Yandex toolbar utility #1 Yandex.Dictionaries Reference and translation resource Yandex.Server Search tech. for servers and networks Yandex.Catalog Yandex.Afisha Yandex.TV Thematic directory of Russian websites Movie and live events guide TV program guide Yandex.Desktop Search Search tech. for personal computers Yandex.Online Incoming notification system Online payment system and mobile applications Yandex.Travel Schedules Plane and train schedules Yandex.Money Online payment system #1 Yandex.Weather Weather forecasts (1,700 cities worldwide) #1 Mobile applications services Mobile versions of selected Yandex 32

33 User Services Yandex.Maps & Traffic #1 The leading maps and traffic service in Russia Key features Monthly users in Russia, June 2008 (000s) Detailed scalable maps with street names and house numbers Satellite images of Russia and Europe Proprietary and exclusive live traffic congestion monitoring system Acquisition of road traffic monitoring agency Smilink User-generated input via GPS-enabled devices Yandex.Adresa fully integrated with Yandex.Maps, helping users find local business listings and events Mobile maps recently launched 120,000 weekly users Information on local businesses Traffic jam viewer Source: Server logs (stat.yandex.ru, stat.mail.ru) 33

34 User Services Yandex.Mail #2 Web mail service for the tech-savvy Russian users Advanced web mail service Monthly users in Russia, June 2008 (000s) Proprietary anti-spam technology Unlimited storage space Opt out option for advertising-free interface AJAX interface Search-as-you-type quick summary feature Advanced address book Transliteration Latin/Russian alphabets Source: TNS Spamooborona anti-spam technology Monthly users in Moscow, June 2008 (000s) Proprietary, popular anti-spam software Used in Yandex.Mail as well as other web mail and corporate systems Filters approximately 95% of as spam Performs analyses of thousands of properties to ensure highly efficient and precise filtering Standalone server solution Mass mail clustering Self-learning system automatically collects spam characteristics Source: TNS 34

35 User Services Yandex.News #2 News aggregation service Key features of Yandex.News Monthly users in Russia, June 2008 (000s) Innovative aggregation features News clustering by event Multi-document summary of an event Geo-tagging and categorization of events Name and fact extraction Linked to biography and quotation database Searchable news stories within minutes of publication on the web by original source No editorial intervention Technology-driven, politically agnostic No preferred sources No proprietary content News aggregators popular in Russia for the diversity of views they provide access to Source: TNS Monthly users in Moscow, June 2008 (000s) Over 2,000 content-for-traffic agreements with copyright owners 30,000 automated entries per day No copyright infringement Source: TNS 35

36 User Services Yandex.News (continued) Innovative functionalities: fully automated news clustering, summaries and facts extraction Real-time breaking news displayed at the top Top news stories Personalities in the news and link to their press portraits Original story and full list of related entries, images and videos Top stories in the same news category 36

37 User Services Yandex.Market #1 The leading comparison shopping service Value proposition Monthly users in Russia, June 2008 (000s) Price comparison and consumer reviews for shops and thousands of products throughout Russia Advanced recommendation engine Database of thousands of product models and features Product description compiled by Yandex Prioritizes display of offerings from shops in close proximity to users, increasing relevance to shoppers and advertisers Cross-shop basket Public wish lists Source: TNS Key features Monthly users in Moscow, June 2008 (000s) Over 1,500 pay-per-click merchants Automatic product categorization and identification Online retailers need to register to get their products and prices referenced; no unsolicited price grabbing Strict merchant quality control Does not compete with online store fronts Yandex does not keep inventory User reviews of merchants and products Source: TNS 37

38 User Services Yandex.Market (continued) Sample product page Pricing evolution List of shops Summary Product description Publish in wishlist Submit reviews Related products Product accessories Detailed product specifications 38

39 User Services Yandex.Dictionaries #1 The leading reference and translation online resource Value Proposition Monthly users in Moscow, January 2008 (000s) Comprehensive reference and multi-language translation tool for Russian users Access to online encyclopedias and more than 60 dictionaries Yandex sponsors digitization of encyclopedia and other offline resources under exclusive agreements Integrated within Yandex.Search to power parallel results Source: TNS Access to a rich and ever-expanding database of dictionaries and encyclopedia Search Languages available for translation List of dictionaries and encyclopedia Total number of dictionaries Recently added dictionaries and encyclopedia 39

40 User Services Yandex.Fotki Photo hosting #3 Photo sharing website Unlimited storage space Easy mass upload tools (built in browser) Launched in 2007 and is already #3 photo hosting service in Russia Accessibility on mobile devices / easy file transfer Social network features Key features Easy photo download My favorite photographers Easy photo print Search Monthly users in Russia, June 2008 (000s) Photo contest Real-time top photos of the day Most popular categories Links to related services Recently downloaded photos Source: TNS; although not measured by TNS, we believe that PhotoFile is #2 40

41 User Services Yandex.Blogs The leading blog search engine in Russia #1 Search Advanced blog search and hosting service Collects important information daily out of the Russian blogosphere The largest and most comprehensive blog search engine in Russia Providing instant access to more than 4.5 million blogs as of June 30, 2008 Key attractions for our users include daily rankings on Yandex.Blogs of the most popular postings and topics Ability to filter spam Most popular blogs Most discussed entries of the day 41

42 User Services New User Services Recently Launched Numerous opportunities to add complementary services and drive further growth in user base Auto search Train and plane schedules Video search and hosting Disk (file sharing) 42

43 User Services Yandex.Money Leading online payment solution with a broad base of users and merchants Active users (000s) Selected online merchant partners CAGR: 129% Russian International Total payments volume ($MM) CAGR: 132% 43

44 Advertiser Services Ads on Yandex s Owned & Operated Websites Access to the large user base of Yandex s search and other services Yandex.Direct Highest ranking ads Yandex.Direct Paid search ads ranked by cost per click, CTR, and relevance Organic search results Produced by Yandex search algorithms Yandex.Market Relevant offers from Yandex comparison shopping system Banner Contextual graphical ads 44