11.03.2014

Where Google Comes Second

There is little doubt that Google is still the most widely used search service in Europe and North America. The countries where Google pass ahead of the local search rivals account for 1 billion users in total. With 91% global market share, Google is still king and rules in all aspects of world's search, including mobile and tablet sector. With a few exceptions, mainly China's Baidu with country's censorship regime, Google steadily pulls ahead of Bing, AOL and Yahoo in online media, web analytics toolkits, web browsing, maps and content delivery networks.


Russia is another world's market that keeps Google down with its local search giant. Yandex already accounts for more than 62% of the Russian search market compared to 26% for Google. Continuous product improvements, customer loyalty as well as numerous advancements to content and search quality help Yandex withstand Google onset and maintain leadership in the Russian market.


The Leader and The Runner-up

Yandex and Google mainly use similar sources to win the battle for consumer's hearts and minds, but Yandex is still one step ahead of Google and its rivals. The company already offers a payment service, online media as well as advanced analytics system and cloud-based technologies. In 2013 Yandex gained exposure to the multi-million audience of the largest movie portal and launched two services for mobile and app developers. At the beginning of 2014 it introduced an open source platform for cloud hosting applications. With all of its success and endless innovations, Yandex has already established itself as a strong player in local display advertising with 47.6+ million unique visitors. But doesn't it all sound familiar for Google?


Google's track record in Russia traces back to 2001, when it managed to reach less than 10% of the market share. After taking a big investment in performance of the search system based on linguistic difference between English and Russian, Google gained a half of the share it owns in the Russian web these days. Otherwise, Yandex has always been perfectly adjusted to the specificities of the Russian language, where Google proved incompetent for a long while and lost a big piece of the market share pie. Early on, it helped Yandex gain advantage over Google in relevance of search results and get recognized among local users. Similarly to Vkontakte and Facebook, Yandex superiority in the region can be partly associated with national preferences, as Yandex search technologies are by far better prepared to accommodate the requirements of Russian users.


Another booster is mobile market. Yandex mobile search market share has just approached 60% on Android and over 50% on Apple devices, providing lucrative opportunities for investors and advertisers to profit from local mobile search. The company has already taken measures to challenge Google on Android smartphones through partnership with Amazon and Nokia. Despite general use of Google service on Android platform, Yandex has already won 90% of market share on Windows smartphones in Russia. With Yandex services pre-installed on Huawei and ZAO Explay devices, Russia's search giant seeks to get another share boost in the region.


Keep Enemies Close

It's not a surprise that Yandex and Google drive most of their revenue from display advertising with Yandex ad network covering 96% of the Russian Internet audience. The latest agreement between Yandex and Google on real-time bidding advertising services leads competition for market dominance to the next level. In strategic partnership both search systems gain access to each other's advertising inventory which will lead to a larger number of bidders and sellers stimulating advertising sales and optimization of ad quality.


On Google part, integration with Yandex advertising network gives the way for Google partners to reach Russian growing audience without need to appeal to Russian publishers. Yandex similarly seeks for new ways to grow customer usage and accelerate revenue flow from ad network. While Yandex competes for market share through extra bidding options, Google is going to shoot ahead of its Russian rival by sourcing local publishing partners.




Outside Russia, Yandex doesn't pose threat to Google worldwide supremacy, though it might disrupt Yandex goodwill in the region. Nevertheless, Google focus on the Russian market is of minor importance compared to the strategic mission in the US, Europe and China, where the potential market is much bigger. And even more, Yandex big game is said to be all about keeping Google two steps behind from getting a strong foothold in Russia. Yandex is by far Europe's greatest exception, whose decline, if happens, will worth Russian advertisers big money, if not their jobs.