Yandex, the Russian online search giant — also running a variety of other digital services — is exploring different “strategic options, including disvestment, for its news aggregation service and infotainment platform Zen.”
The company stated Friday it intended to “focus on developing its other technology-related businesses and products (including search, advertising, self-driving and cloud) and transactional services (including ride-hailing, e-commerce, video/audio and streaming), among others.”
Citing unnamed sources, TechCrunch believes the move is linked to the government’s crackdown on free expression, including a new law banning what the authorities consider to be “false” information or just inadequate wording, such as the prohibited term “war,” about the Russian military.
As the divestment process is “at an early stage”, Yandex did not name any potential buyers, but “sources close to the discussions” told TechCrunch that VK Company “is a leading contender.”
Previously known as Mail.ru Group, VK Company has been Yandex’s traditional rival on the Russian digital scene. Indirectly controlled by the government, this group owns Russia’s leading social networks VK (Vkontakte) and OK (Odnoklassniki) as well as a variety of assets in the fields of gaming, entertainment, news services, and others.
As reported earlier this week by Russian media, VK Company prepares to launch a new corporate messaging service and relaunch the international messenger ICQ, which it acquired in 2010.
Personal sanctions
So far neither Yandex nor VK Company as such have been targeted by western sanctions. However, the top executives of both companies were hit. VK’s CEO Vladimir Kiriyenko is featured among “elites and families close to Putin” in the US Treasury’s Feb. 22 sanction list, while Yandex’s executive director and deputy CEO Tigran Khudaverdyan, alongside other Russian business figures, has had his assets frozen and been imposed a travel ban as part of a new wave of EU sanctions earlier this week.
Pointing out Yandex’s role in “hiding information from Russians about the war in Ukraine,” the EU believes Khudaverdyan could be a “key element” behind the manipulation of Yandex’s search results.
The EU also notes that Yandex has been “warning Russian users looking for news about Ukraine on its search engine of unreliable information on the internet, after the Russian government threatened Russian media over what they publish.”
Yandex is exposed, too, on the financial side. On Feb. 28, as Russian stocks were collapsing as a result of Russia’s invasion of Ukraine, the Nasdaq halted trading of many Russian firms, including Yandex, which had been listed there since May 2011.
Yandex subsequently warned about a risk of default as the suspension exceeded five trading days. As a consequence, the holders of $1.25 billion worth convertible notes have the right to require Yandex to redeem their notes.
