With the growing tensions in Ukraine and Russia, Yandex is hoping to cut relations with the country to shield its new businesses from the fallout. This could be a potential setback for the Russian government’s efforts to develop homegrown substitutes for Western products that sanctions have choked off.
As part of an unexpected sweeping overhaul, Russian holding company Yandex decided to make plans for moving their most promising new technologies outside of Russia.
They’ll sell the rest, including popular internet browsers, food deliveries, and taxi-hailing apps. The plans were kept under wraps because of the sensitivity of the discussions.
With the war in Ukraine, it’s unlikely that Yandex will be able to bring new technological innovations to the table.
Their businesses would fall short in Western markets and require access to Western ideas and technology, which won’t happen due to Russia’s involvement.
However, the Russian subsidiary of Yandex would continue its services for existing customers in the country under new stakeholders.
Yandex must obtain the Kremlin’s approval in order to transfer Russian-registered technology licenses outside of Russia. It also has to find buyers, as they will most likely be within the country.
It’s also necessary for the company to have its shareholders approve a plan that would change prices and structure.
Yandex has a plan in place to finance its expansion, and it’s being led by Aleksei Kudrin, Russia’s chief government auditor. Mr. Kudrin is acting for the company as an informal advisor but may take a managerial role in the future.
A few people familiar with the matter said that Mr. Kudrin would meet up with Mr. Putin this week but that the Kremlin hadn’t yet been made aware of it.
With Western efforts to isolate Russia economically after its invasion of Ukraine, the once-thriving company has been devastated.
Yandex’s share price had plunged 62 percent in the past year while its New York-listed shares lost more than $20 billion in value before the Nasdaq stock exchange suspended trading.
Since the start of the invasion, more than 18,000 Yandex’s employees have left Russia, and former deputy chief executive Tigran Khudaverdyan had a unique perspective by calling it a ‘monstrous war.’
In August, Russia’s largest search engine, Yandex, decided to sell its online news aggregator, which was full of state propaganda due to increasingly strict Russian media laws.
The European Union hit Mr. Khudaverdyan in March with sanctions due to Yandex’s role in propagating Russia’s war narrative. Mr. Arkady Volozh, the company’s Israel-based founder, was hit with sanctions by the bloc after many months. Both quit the company to allow it to operate in Europe following the sanctioning.
The outlook of war is not only hampering the Russian economy but Ukraine’s normal daily routine too. The missile attacks from the Russian military caused a major infrastructure breakdown in various cities of Ukraine.
The war is destroying the lives of millions of people, and there are still no signs of ceasing.