'Yandex', Known as the Russian Google, Withdraws from Russian Market... Begins Restructuring

Recruiting Putin's Close Associate to Management for Restructuring
Parent Company Relocates to the Netherlands... Aiming to Minimize Losses

The headquarters of Yandex Group located in Moscow, Russia. Moscow (Russia) = Reuters · Yonhap News

[Asia Economy Reporter Hyunwoo Lee] Yandex, Russia's largest portal site known as the 'Google of Russia,' is reportedly negotiating with the Russian government to sell its domestic business and relocate its headquarters to the Netherlands. Yandex plans to accelerate its withdrawal from the Russian market by recruiting close aides of Russian President Vladimir Putin into its management team. As sanctions against Russia due to the Ukraine war continue to prolong, it is expected that more Russian companies will relocate their headquarters abroad in the future.

According to Russian local media The Bell on the 24th (local time), Yandex is pushing for a meeting with President Putin to obtain approval from the Russian government for the sale of its domestic business and the relocation of its headquarters to the Netherlands. Yandex is said to have recruited Alexei Kudrin, head of the Russian Accounts Chamber and one of Putin's close aides, into its management team to secure the president's approval.

Kudrin has been one of Putin's closest associates since 1995 when Putin served as mayor of Saint Petersburg. After Putin was elected president in 2002, Kudrin served as finance minister and led economic reforms. Citing sources, The Bell reported, "Kudrin has completed discussions with President Putin and Kremlin Chief Deputy Sergey Kiriyenko," adding, "A meeting for final approval is expected to be held as early as this week or next week."

If President Putin grants final approval, Kudrin plans to resign from public office and become the head of Yandex Russia, overseeing the sale of Yandex's Russian branch and related domestic companies. Yandex is expected to sell its subsidiaries in Russia, relocate its headquarters to the Dutch holding company Yandex NV, and completely withdraw from the Russian market.

Through this domestic market withdrawal and restructuring, Yandex plans to sell all domestic companies except for four sectors: autonomous driving, cloud computing, educational technology, and data labeling. However, to implement this restructuring plan, approval procedures must be followed not only with Yandex shareholders in Russia but also with those in the Netherlands.

Despite aggressive marketing by Google, Yandex grew into a global influential giant IT company, holding over 60% of the Russian portal market. The reason for Yandex's withdrawal from the Russian market is interpreted as due to sanctions against Russia. As sanctions have prolonged following Russia's invasion of Ukraine, the company's value has plummeted and deficits have accumulated. Additionally, as domestic censorship intensified, Yandex sold its news and blog business to the Russian social media company VK.