Yandex

• 1. Introduction

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  Yandex holds roughly 72 percent of all search traffic inside Russia, a grip tighter than Google enjoys almost anywhere else on earth. That dominance was built not in Silicon Valley but in Moscow, by two friends who started working together in 1990 on software that could comb through Russian-language texts. What does it take to build a technology empire inside one of the world's most surveilled states? How do you keep the government's hands off your servers when the law demands you hand over encryption keys? And what happens to a company like that once its home country invades a neighbor and the world begins closing the door? Those are the questions this story sets out to answer.

• 2. Two Friends and a Name

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  Arkady Volozh reached out to Ilya Segalovich in 1990 with a simple pitch: join me and help write algorithms that search Russian texts. Segalovich, born in 1964 and a friend of Volozh's from high school, said yes. The two worked together under the company name Arcadia, and three years later they came up with a name for their search technology that still amuses linguists. "Yandex" was meant to stand for "Yet Another iNDEXer," but it doubled as a bilingual pun. The Cyrillic letter "Я," which sounds like "ya," means "I" in Russian, so the word quietly declares itself an index of the self as much as an index of the web.

  On the 23rd of September 1997, the Yandex.ru search engine went live. Its public debut happened at the Softool exhibition in Moscow, an event aimed squarely at the Russian technology trade. The timing mattered. Russia's internet was just beginning to take shape, and anyone who could offer a search engine tuned for Russian grammar and morphology had a structural advantage over foreign competitors.

  Within a year the company had started selling contextual advertisements, and by 2000 it was incorporated in Cyprus as a standalone company. Arcadia, meanwhile, became part of CompTek, a software and computer parts firm, with Volozh as CEO. That same year, Baring Vostok Capital Partners acquired a 35.72 percent stake for $5.28 million, giving the fledgling operation its first serious outside investment.

• 3. Building the Platform

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  Yandex turned profitable in 2003, a milestone that validated its advertising model and gave it room to expand. The years that followed were a cascade of acquisitions and new services, each extending the company's reach into a different corner of daily Russian life.

  In June 2008, Yandex announced the formation of Yandex Labs in Silicon Valley, appointing Vishal Makhijani as its CEO to drive innovation in search and advertising technology. That same month it acquired SMILink, a Russian road traffic monitoring agency, and folded it into Yandex Maps. A few months later, in September 2008, the company bought the rights to Punto Switcher, an automatic keyboard layout switcher that could flip between Russian and English input without the user lifting a hand.

  A telling moment came in January 2009, when Firefox 3.5 replaced Google with Yandex as the default search provider for Russian-language builds of the browser. Google was reinstated three years later in 2012, but the episode showed how seriously European software makers took Yandex's standing in its home market.

  September 2010 brought two significant moves in a single month. Yandex launched Yandex Music with a catalogue of 800,000 tracks from 58,000 performers. It also invested in a $4.3 million financing round by Face.com, a facial recognition startup. When Facebook acquired Face.com in 2012, Yandex received $5.7 million and 142,479 shares of Facebook stock in return for its early bet.

  The company's IPO in May 2011 crystallized how large it had grown. The holding company Yandex N.V., now called Nebius Group, raised $1.3 billion on NASDAQ. The trade press described it as the biggest dot-com IPO since Google's offering in 2004. At that moment, Baring Vostok held 35 percent of the company and Tiger Technologies held 15 percent.

• 4. Open Source and Machine Learning

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  In 2009, Yandex began internal development of MatrixNet, a patented algorithm for building machine learning models built on one of the original gradient boosting schemes. The work stayed proprietary for years. Then in July 2017, the company released CatBoost, a library that made the MatrixNet approach available to anyone.

  By the time CatBoost reached the public, it was already running inside a project with the European Organization for Nuclear Research, better known as CERN, where it was being used to analyze the results of particle physics experiments. That collaboration gave the library an unusual pedigree for a product coming out of a Russian internet company. JetBrains adopted CatBoost for code completion; CloudFlare used it for bot detection; Careem integrated it for trip-distance calculations.

  The company's open-source contributions stretched across several other areas. In October 2013, Yandex launched Cocaine, an open-source platform-as-a-service system for building custom cloud-hosting applications. In June 2022, it published the source code for YDB, a database management system that powered its own voice assistant Alice as well as Yandex.Go and Yandex Market. In March 2023, it released YTsaurus, a platform designed for working with very large datasets.

  Speech technology became another public-facing offering. In October 2023, the company introduced Yandex SpeechKit, a speech-recognition and synthesis tool with a public API available to Android and iOS developers. The natural language research that fed SpeechKit had begun more than a decade earlier, in 2012, when Yandex first set up a dedicated team for that work.

• 5. The Pressure of Power

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  Russia's government watched Yandex's growth with an interest that was rarely benign. In June 2019, the Russian Federal Security Service invoked the so-called Yarovaya law to demand that Yandex hand over encryption keys capable of unlocking private emails and cloud storage data. Yandex refused, arguing it was impossible to comply without destroying user privacy. Deputy Prime Minister Maxim Akimov stepped in to say the government would ease pressure on the company. The head of Russia's communications regulator, Alexander Zharov, later said Yandex and the FSB had found a compromise: the company would supply the required data without actually surrendering the keys.

  The November 2019 corporate restructure was more direct. Under pressure from the Kremlin, the company reorganized its board to give pro-government members more influence. Vladimir Putin was reportedly personally involved in the negotiations that produced the new structure.

  In March 2022, Tigran Khudaverdyan resigned as executive director and deputy CEO. The European Union had sanctioned him for what it described as hiding information from the Russian public through the manipulation of search results. An investigation published by Meduza on the 5th of May 2022 added further detail: since 2016, the five top results on the Yandex home page had drawn only from pro-Kremlin media outlets approved by the Presidential Administration of Russia. Yandex maintained that its rankings were generated automatically by its algorithm, citing Russian law's requirement that only registered media sources could appear.

  In August 2020, Yandex's offices in Minsk were raided by Belarusian authorities seeking to suppress protesters disputing the results of that country's presidential election. In June 2023, a Moscow court fined Yandex 2 million roubles for repeatedly refusing to hand user data to the FSB. In the first half of 2024 alone, Russian authorities sent 36,540 requests for user data, a 12 percent increase over the same period the prior year.

• 6. Ukraine and the Breaking Point

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  Yandex's relationship with Ukraine had been extensive before it collapsed. By 2008, the company had increased bandwidth between its Moscow data centers and the Ukrainian internet exchange point fivefold. In May 2007, it opened a development center in Kyiv. By 2010, it had built a dedicated search engine algorithm for Ukrainian users.

  In May 2017, Ukraine's president signed Presidential Decree No. 133/2017, banning Yandex outright. On the 1st of June 2017, the Security Service of Ukraine raided the company's offices in Kyiv and Odesa, accusing it of illegally collecting Ukrainian users' data and transmitting it to Russian security agencies. Yandex denied any wrongdoing. The company had already closed its bank accounts in Ukraine that month, and the offices shut down.

  After Russia launched its full-scale invasion of Ukraine in February 2022, the company stopped displaying any national borders on Yandex Maps. That same month, the Russian government threatened Yandex over information it had posted about Ukraine. In March 2022, trade reporters documented that Yandex-delivered advertisements were appearing alongside articles promoting misinformation about the war, and that state-owned and state-sponsored Russian outlets dominated its news aggregators.

  The personal toll was also visible. CEO Elena Bunina resigned in April 2022 and moved to Israel. Volozh himself resigned from the CEO role in June 2022 and from the company entirely by December 2022. In July 2024, the Dutch holding company Nebius Group, which owned Yandex, sold the Russian assets to a consortium of Russian investors for a discounted price of $5.3 billion. The publicly identified buyers include Alexander Chachava with 25 percent, Pavel Prass with 15 percent, Lukoil with 15 percent, Alexander Ryazanov with 10 percent, and senior management holding the remaining 35 percent. Observers have speculated that some of those named are intermediaries acting on behalf of others, and Vladimir Potanin had been among the other bidders for the assets.

• 7. Products That Outlasted Their Origins

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  Yandex Taxi became the largest ridesharing company in Russia after Yandex acquired Uber's operations in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus, and Georgia in February 2018. The deal reshaped the region's transportation market in a single transaction.

  Yandex Games launched in 2018 as a browser and mobile gaming platform. By January 2022, it had more than 11 million players per month, with 10,000 games available by 2022. The platform earns revenue through advertising, in-app purchases, and its own in-game currency called "Yans."

  In February 2018, the company demonstrated the first public tests of its self-driving cars in Moscow. By September 2020, the self-driving division had been spun off as a separate entity, later known as Avride. In June 2023, the company launched a test of its first self-driving taxi on Moscow streets.

  The intelligent assistant Alisa, also spelled Alice, arrived in October 2017 for Android, iOS, and Windows. By May 2023, Yandex had integrated its own large language model, YandexGPT, directly into Alice, positioning the assistant to compete in the generative AI space that ChatGPT had opened up. Between 2021 and 2023, Yandex also rolled out automatic voice-over translation for YouTube videos in English, Chinese, French, Spanish, and German.

  In October 2024, Yandex announced plans to invest $400 million in Turkey, a signal that even after the Russian asset sale, the international portions of the business were pursuing growth well outside the country where the company began its story at a Moscow trade show in 1997.