Google it? No - Yandex it!
Internet search engines make most of their money from advertising. And that's evolved from simple banner ads to what's called contextual advertising which responds to the words you enter in a search.
Google is the top engine in most of the world – but not when it comes to Russia and countries with a significant Russian-speaking population.
Yandex holds 1st place in Russia with contextual advertising
So how is it that the global leader Google fares so poorly in the Russian-speaking world?
Before Google appeared in Russia, a powerful, local search engine machine had already established large popularity, explained Maria Chernitskaya, General Director of Icontext.
“Specifics of the Russian language and its morphology limited Google and they looked to develop in other European languages – French, German, and Spanish, for example. And now Google is finding a hard time in competing with the players that did look to cater to Russian Internet users,” Chernitskaya noted.
Russia's internet advertising market was worth $420 million dollars in 2007. Of that, about a quarter, or $110 million, comes from search-related adverts.
Yandex holds first place in Russia with contextual advertising. Its main competitors are Rambler and Mail.ru. Google is estimated to have no more than a 15% market share and has been slow to develop a Russian-language variant with its service appearing to be little more than a translation from English.
“Begun”, the largest advertising network in the Russian sector of the Internet, distributes ads between partner sites and works with the Rambler web portal.
Aleksey Basov, General Director of Begun, said Internet ads have been one of the drivers of Russia's economy for a few years now, and they are one of the fastest-growing segments of Internet business.
“Two players – Begun and Yandex – currently occupy about 90% of the Russian contextual ad market. Small and medium-sized businesses use these ads as a channel for sales, as they provide significant coverage, results, and are generally affordable. Media ads are usually reserved to large businesses, who also contribute the most money to Internet advertising,” Basov pointed out.
The bulk of contextual ads in Russia come from automotive companies, financial services, and real estate – much as elsewhere.
Maria Chernitskaya noted that overall the Internet advertising market is doubling every year.
“Contextual ads are growing even faster, and for the past two years growth has been up to 150 percent a year. 2008 is likely to continue such fast growth as small and medium size businesses become aware of the opportunity of this type of advertising”.