The main points of the CEO of Yandex Alexander Shulgin from an interview with the newspaper Kommersant

    General Director of Yandex LLC Alexander Shulgin gave a voluminous interview to Kommersant newspaper. This is the first big interview of the new head of Yandex’s Russian office since taking office.

    The conversation turned out to be large-scale and touched on many topics: from the search business and Google’s confrontation, the impact of the crisis on business and the future prospects of the largest Russian IT company.

    Megamind gives the main points made in the interview.

    About the antitrust case of Yandex v. Google


    Our position is very simple: as soon as you become a monopolist, you cannot use dominance in one area to promote your products from a completely different field. These are the antitrust rules in all developed countries.

    Now it’s not just a major player: according to all measurements, Android devices have a global share of more than 80%. Super success, like Microsoft used to have on computers. It would seem, reap the benefits, distribute your operating system. But they went further, which seems completely unfair to other players: in particular, to someone like us. They began to limit the pre-installation of our services on manufacturers' devices.

    At first, we were faced with restrictions on the preinstallation of our services on the main screens of the devices of the largest world manufacturers. We put up with this for a long time, without losing a single opportunity to work with our partners. But last year, Google went further and began to impose a complete ban on the preinstallation of all Yandex services on smartphones of brands for which Russia was the main market.

    When some manufacturers get a complete ban on installing our services, apparently, in exchange for some share of Google’s search revenue. This is their contractual relationship, but the fact is that we worked with all three manufacturers - with Explay, with Fly, and with Prestigio, they preinstalled our services, we had commercial, mutually beneficial relations with them for several years. But at some point, our long-standing partners were forced to say: “That's it, we can’t bet you anymore - this is Google’s demand.”

    We never owned an operating system. In the PC world there was Windows, they handed out Internet Explorer, which was at one time the main browser. Our answer was to make an excellent quality product that people will choose for themselves. In the world of closed platforms, the answer is the same: make great apps that people choose for themselves. If our product is good, then we will get our market share, but the means of delivering the product to the user are also important. Nevertheless, now, although our ability to promote Yandex applications on Android is very limited, our search share on this platform reaches 44%. The number one goal is a quality product, the second goal is to provide an opportunity to deliver your product to users, and our application to the FAS should help solve this problem. We want to achieve

    About partnership with other companies within the FairSearch alliance


    Microsoft is part of the Fair Search alliance, according to which the European Commission is investigating Google’s actions on Android in Europe. Last year, we were attracted by a witness in this investigation, since Yandex is one of the few Google search competitors. Fair Search and I share common interests in creating equal conditions for all Android games. In a recent statement, the Fair Search alliance, which includes Microsoft, Oracle, Nokia, Expedia, TripAdviser and many others, supported our statement to the FAS.

    About further plans for the development of the company


    I am sure that Yandex has a very large growth potential. The company developed rapidly on products created in the early years of Yandex - search, advertising technologies, mail, maps, etc. The audience of the portal is almost the entire audience of the Russian Internet, and the Internet as a sector is increasingly increasing its share in the total advertising pie (according to AKAR, in 2010 the share of online advertising in the advertising market was 12%, and in 2014 - almost 25%). Of course, when you become big, then, as in all sectors, growth slows down. But Yandex has a world-class technological potential. I see serious opportunities for expansion in Russia, and for certain areas - a good opportunity to go beyond Russia.

    Firstly, in Turkey we continue to be engaged in the quality of products and would like to increase the share of our search. Luring the user to him is a difficult task, so product quality is a prerequisite for this. But it takes time and effort to convince Turkish users that “Yandex” and “excellent” can be equated.

    Secondly, another direction of development is products for business. In our case, these are Yandex advertising technologies, we will also invest in them. The barrier to switching to a new service in this area is relatively low.

    The third - what was a mystery to us a few years ago - is a mobile direction. In some areas, everything is fine with us. For example, our geo-applications - "Maps", "Navigator", "Transport", "Metro", "Parking" - are very popular, we see this by audience, by reviews. But obviously more needs to be done. We will invest resources in the mobile direction.

    On the impact of the crisis on the company


    We do not live one day. Crises come and go, it is not known how long this one will last. Our goal is to ensure the development of the company for years to come. Therefore, we will do the same as we did in the last crisis: we focus on what is most important for the company. Now it’s a search, advertising technology, these are our new business initiatives. For example, niche players like Yandex.Taxi - against the background of the whole Yandex, this is not a very large project, but it is growing very quickly.

    The company has been actively recruiting people in recent years, we have grown even at a slightly faster pace than the market and in relation to the growth of our revenue. Just for statistics: in 2013, 1,900 people came to Yandex, 650 left or were laid off, in 2014 - 1,500 and 750, respectively.

    About the advertising component


    Almost all the advertisers that are on the TV have Yandex. We still have different products.

    As for the similarities in advertisers, already in 2010 the largest Yandex advertisers were well-known brands, and their advertising budgets amounted to several million rubles a year. But, since the number of advertisers in "Direct" is very large, even the largest advertising budget in "Direct" does not exceed 1.5% of the total revenue of Yandex.

    About the costs of Yandex


    We usually invest in data centers. And this is the same as search, more than 2/3 of all our CAPEX goes to server hardware for search. And in 2015, we will continue to invest in this. Perhaps even at an accelerated pace, because we see, on the one hand, the need, on the other - the opportunity to increase the search base.

    On the income of Yandex


    In this economic situation, it is difficult to forecast a year in advance. I do not want to not live up to expectations, giving too optimistic a figure. On the other hand, I don’t want to frighten people in vain, because - what if it works better? The horizon of vision that we have for the quarter, we can unveil. In principle, this is often the case for Internet companies: Google does not give forecasts at all, Baidu gives for the quarter, although the situation in their markets is much more stable. When everything was stable in Russia, we gave for a year, now it seems unjustified.

    Auto.ru


    Yandex exists to solve the tasks of people, satisfy their need for information, and connect the offline and online world in this area. We bought Auto.ru in order to do what, in our understanding, will be the best service for buying and selling cars. First of all, for individuals, for those who sell their own cars, but also for car dealers. This is the purpose of the transaction.

    Kinopoisk


    We plan to add the ability to watch movies online, but we will not own this content, but will attract a large group of partners who will provide content. The main value we want to create for users is a recommendation system. Sometimes choosing a movie takes more time than there is, in principle, to watch it. We want to make a recommendation technology that saves time and allows us to discover new films.

    We will work on the basis of different models. Do not forget about advertising that can be shown when viewing content and thus pay for viewing. We will not decide for our partners, they will be free to choose.

    Yandex browser


    The new alpha version of the professional community was received very positively. We will gradually transfer those ideas that are presented in alpha to the main product. Last year, there were only two growing browsers in Russia - Chrome and our browser. According to LiveInternet, in February 2015, Yandex.Browser became the second most popular desktop browser in Russia, overtaking Firefox, Internet Explorer and Opera.

    About the Data Factory


    The goal we want to come to in a few years is to provide online service to customers from the corporate sector. And it looks something like this: the client uploads its data in some kind of structured form, and the algorithms and robots on our side extract useful recommendations from this data so that the company can increase its performance. This is called predictive analytics (predictive) and even prescriptive (prescriptive). Ultimately, the "Data Factory" should become a corporate tool that could be scaled to the tasks of thousands of different customers from different areas.

    Now our technologies are being developed on individual solutions. We move from the pilot stage to real projects, but since we start from scratch, then any new client we have to do a pilot on a test database. When we prove to ourselves and the client the effectiveness of the first pilot, we proceed to partnership on commercial terms. For example, we commissioned Rosavtodor to create a system that can predict traffic jams and accidents. And for Wargaming, they learned how to predict the outflow of World of Tanks players. Among our clients are Astra Zeneca, Opera Software, Intel. These are not the only examples, but only those that we can talk about.

    About Yandex.Taxi


    Taxi service is useful in very large cities. Now focus on Moscow in the first place. The second is Peter. We also see a huge number of opportunities to improve the quality of service and develop it as a business. A lot of work.

    The ideal situation is when all competitors reveal their results and then you understand where you are relative to the market. It makes you move faster. Very useful when you understand what is happening. But in the taxi market, the situation is opaque. We are a public company, we show, and no one else. It turns out that we are in an unequal situation with the rest, because everyone can compare themselves with us, draw conclusions and run faster.

    About Yandex Market


    We saw at the end of the year that the CPA began to grow faster, but I can’t say that there was a breakthrough. We still have linear growth, although it has accelerated. Nobody expected the Market to switch to a new business model immediately. But the plans and intentions remained the same: to promote the marketplace, CPA-model, expand the categories of goods and go to the regions.

    On the involvement of Arkady Volozh


    Physically or through various means of communication, Arkady is involved in all important events. He is still involved in the life of the Russian Yandex. Due to the fact that I am engaged in operational activities in Russia, he devotes more time to the international direction. But the Russian Yandex, of course, did not completely leave. Still with us.

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