Vkontakte founder sells his stake while the social network sets new traffic record
Pavel Durov, the founder of VKontakte.ru (VK.com), Russia’s leading social network, has sold his 12% stake in the company to Ivan Tavrin, the general director of mobile operator Megafon and a member of the Mail.Ru Group‘s board of directors.
In his post on Vkontakte, Durov said that he would continue to oversee the company’s functioning as a founder, and that the changes in shareholder structure would not affect the company’s management.
However, Durov’s statement came one week after VKontakte replaced its vice president and chief financial officer with new team members.
The deal was signed in December 2013, the Russian business daily Vedomosti reported, referring to unnamed sources close to VKontakte’s partners and shareholders. The amount of the sale is unknown, but Vedomosti’s sources said the company is valued at $3 billion to $4 billion.
Tavrin is an ally of billionaire Alisher Usmanov, a major shareholder of Megafon and Mail.ru Group. The latter, an LSE-listed Russian Internet group, owns a 40% stake in Vkontakte.
The sale of Durov’s stake means that Usmanov and his allies now control directly or indirectly 52% of Vkontakte.
Constant shareholder tensions
Durov’s relations with the other shareholders of the company were marked by regular tensions.
A few years ago, the young businessman referred to Mail.ru Group as a “trash holding.” He also called one of the group’s properties “a tasteless warehouse of viruses and warez.”
In October last year, Durov threatened to sue United Capital Partners – a fund that had become the company’s main shareholder after acquiring a 48% stake from two Vkontakte co-founders – for defamation.
The statement came after UCP publicly accused Durov of spending most of his time on personal projects – which could entail potential conflicts of interest between Vkontakte and Telegram, an IM project that Durov launched outside of Vkontakte.
The investor also stated that VK’s founder is “pathologically unable to respect agreements and rules of conduct,” and made it clear that another may replace Durov as head of Vkontakte.
New traffic record
Arguments between shareholders did not stop the social network’s growing popularity. Vkontakte recently registered a record 60 million visits from Russia and beyond in one day, Durov claimed last week on his VK page, up 10 million in a mere four months.
This growth dynamics could be partly explained by the network’s partnership with the upcoming Winter Olympics.
TNS has estimated Vkontakte’s average daily audience in December 2013 at 24.9 million unique users – ahead of competing networks Odnoklassniki.ru (17.9 million), Moi Mir (5.1 million) and Facebook (4.1 million).
Facebook lags far behind its Russian competitors in monthly terms, too, with 25.4 million unique users vs. 51.2 million for Vkontakte.
TNS’s figures take into account only users of 12 to 64 years of age from Russia.
With a growth of nearly 20% in 2013, Vkontakte came eighth globally, leaving Facebook in ninth position, according to a recent Citi report cited by Russia Beyond The Headlines.