Yandex sells media division, putting distance between itself and the Kremlin

By selling its media business, ‘Russia’s Google’ hopes to depoliticise the company, and to focus on search and food delivery, following intense criticism and the threat of sanctions.

Why it matters

While it might save the company’s bacon, the sale of its media division – a news aggregator called Zen infotainment – to government-owned VK (‘Russia’s Facebook’) places even more of the country’s media under Kremlin control.

Yandex is widely considered the market leader in Russian search, and until the invasion of Ukraine had been one of the country’s most visible and celebrated tech companies.

What’s happening

• While Yandex is gaining some freedom from scrutiny in the all-share deal, it is also gaining VK’s Delivery Club app, an existing area of focus for the firm and a promising source of growth.
• The deal has been expected for some time, with reports first emerging in March that the NASDAQ-traded firm, which had once held international ambitions, was looking to wash its hands of media.
• In June, founder and chief executive Arkady Volozh was placed under EU sanctions for “promoting state media and narratives in its search results and deranking and removing content critical of the Kremlin,” the bloc explained in its decision. Volozh soon resigned and many Yandex employees have since fled the country.

Key quote

“We are buying our freedom,” a source close to the action told Reuters. “This business had been such a weight on our feet. This will enable us to do our business significantly depoliticized, practically completely depoliticized.”

Sourced from the FT, Reuters, WARC, Bloomberg