Yandex Q2 2011 Market Update
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Transcript of Yandex Q2 2011 Market Update
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Q2 2011 Update Search
July 2011
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Forward Looking Statement Disclaimer
This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical fact, including statements regarding the expected growth of the internet search market and the number of internet and broadband users in the countries in which we operate; competition in the internet search market in the countries in which we operate; our anticipated growth and investment strategies; our future business development, results of operations and financial condition; expected changes in our margins and certain cost or expense items as a percentage of our revenues; our ability to attract and retain users, advertisers and partners; future advertising supply and demand dynamics; are forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual outcomes and results to be materially different from those projected. These risks, uncertainties and assumptions expressly qualify all subsequent oral and written forward-looking statements attributable to Yandex or persons acting on its behalf and include, but are not limited to, the following: the growth of the online advertising market; competitive dynamics in our market; quarterly fluctuations in our operating results; seasonality; our ability to attract users and search traffic; our ability to continue to develop successful services; the adoption of social, mobile and the web as relationship marketing channels; our ability to maintain profitability; global economic conditions; political, legislative and regulatory developments and the other risks described under “Risk Factors” and elsewhere in our prospectus. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. We cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of these forward-looking statements after the date of this presentation or to confirm these statements to actual results or revised expectations, and we disclaim any obligation to do so, except as required by law.
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Introduction
Yandex: World-Class Technology & Internet Leader
#1 Internet Destination
38 million unique visitors per month
44% of Russian users’ homepages
#1 Search Leader
65% search market share in Russia
Leading Online Advertising Platform
180,000+ advertisers
58% online ad market share
Largest Russian Internet Business
$440 million Revenues (2010)
$217 million Adj. EBITDA (2010)
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14% 22%
65% 80%
14%6%
69%
4%27%
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Key Investment Highlights
Naver
Yandex
Baidu
(launched 1997) (launched 2001) (launched 1999)
1 2 3
1. As of March 2011 2. Average market share for 2010 3. As of August 2010
Russia China South Korea
Yandex
Google Others
Baidu
Others Others Google
NHN
Source: Liveinternet.ru, iResearch, SearchEngineWatch.com, Nielsen KoreanClick
Local Champions Can Win in Search
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Key Investment Highlights
Source: Company information, Liveinternet.ru, iResearch, SearchEngineWatch.com, comScore
Continuous Focus on Innovation
1. Baidu News Service launch date based on being available as of the date of IPO
1998
1997 2000 2002 2004
2002 2004 2006
2001 2005 2008
1
Search
Maps Shopping News
Payments
Language Understanding
1989
2005
1989
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Local Focus and Understanding Russia/CIS is our “Backyard” Locally-relevant Content and Services
Financial Review
Our Ad Campaigns Have a Russian Accent…
Search Verticals Maps/Traffic Street Views
Images Videos Music
Goods Blogs
…
“The monitor does not give consultations.”
1,400 different territories for Yandex
Russia + Ukraine + Kazakhstan + Belarus
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Source: LiveInternet.ru (March 2011)
Key Investment Highlights
Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11
Source: LiveInternet.ru (March 2011)
22%
7%
2%
5%
5%
26%
Search Traffic Share 1
Yandex: The Search Market Leader in Russia
1. Search traffic reflects Russian users to Russian websites
2006 • Google opens office in Russia • Google introduces Russian
language morphology
65% 58%
November 2009 Launch of MatrixNet
January 2010 Mail.ru stops using Yandex for search
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Yandex is Replicating Success in Adjacent Markets Key Investment Highlights
Share of Search Traffic in Ukraine, Kazakhstan and Belarus 1
Apr-09
Jun-09
Aug-09
Oct-09
Jan-10
Mar-10
May-10
Aug-10
Oct-10
Dec-10
Mar-11
Jan-10
Apr-10
Jun-10
Aug-10
Nov-10
Jan-11
Mar-11
Ukraine Kazakhstan Belarus
Source: LiveInternet.ru (March 2011)
(2005) (2009) (2010)
19%
29%
3% 3%
73%
64%
26%
52%
48%
22%
24%
20% 6%
7%
40% 37%
48% 46%
1. Search traffic reflects transitions by respective country’s users to local and Russian sites
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Sources: LiveInternet.ru (March 2011) 1. Based on monthly search traffic to Russian websites from Russian IP addresses
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Number of Searches per Month (MM) 1
Leadership in a Fast-Growing Market
сен.05 мар.06 сен.06 мар.07 сен.07 мар.08 сен.08 мар.09 сен.09 мар.10 сен.10 мар.11
2,336
54
254
783
68
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The Gateway to the Russian Internet
News
Traffic Jams / Maps
Yandex.Money
Comparison Shopping
Russia’s Most Popular Homepage – 44% of All Russian Users
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The Most Popular Online Destination in Russia
Monthly Unique Visitors in Russia (MM)
Source: comScore (March, 2011)
38.335.7
31.6
28.4
23.3
YANDEX MAIL.RU Vkontakte Google Odnoklassniki
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Russia: Large and High Growth Internet Market Opportunity Key Investment Highlights
Growth in Internet Users vs. Penetration
0
20
40
60
80
100
0 5 10 15
Inte
rnet
Pen
etra
tio
n 2
01
0 (
%)
Internet users CAGR 2010-14e (%)
Source: Euromonitor (January 2011), FOM (March 2011) for Russia
Key Developed Markets
Total Internet Users (MM)
Brazil
China
India
Russia 2010
80
5054
66
3933 31
Germany UK Russia France Italy Spain
2010 2014E
Russia 2014e
2010 2014e
BRIC
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7.9
9.6
11.8
14.6
2010 2011e 2012e 2013e
2%
5%
10%11%
13%
15%
18%18%20%
29%
UK China Germany France US Spain Russia Italy Brazil India
13
The Russian Advertising Market Is Booming Market Overview
Source: ZenithOptimedia (April 2011)
Russian Total Ad Market ($ Bn) Online as % of Total Ad Spend – 2010
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Russia – A Rich Source of Technical Talent
Education in “Hard” Sciences Math & Programming Olympiads
Financial Review
Yandex School of Data Analysis Best Place to Work for Russian Developers
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Technology, Technology,
Technology, Local Focus,
Culture. 15
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v Simple auction based bidding; but with some local differences v Geographic targeting is important; but you can dip your toes in without it
v Russian language is very different; localization and translation from English is difficult
v “Conversion” can be different; make sure you are measuring the right things
4 Things to Remember when you use Yandex
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v Contact International Business Development team
v Free translation, training and initial setup v Local optimization and campaign feedback v Dedicated English speaking Account Manager in Moscow v Web based reporting, budgeting, etc. available in English language interface
v Yandex U.S. entity available for simplified payment, invoicing & contracting
v Dollars vs. Rubles v Post pay billing available v U.S. vs. Russian legal jurisdiction v European entity planned for late 2011
Get Stare
Want to try Yandex?
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Preston Carey Director, Business Development [email protected] +1 857.288.8762 @prestoncarey
Thank You!