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Yandex eyes IPO

Search engine Yandex is to follow in the footsteps of Mail.ru with a billion-pound IPO as interest rises in Russian technology companies.

The company will list at the beginning of 2011, an unidentified source at Yandex told RBK Daily, with the London Stock Exchange the most likely destination, although the US-based Nasdaq has also been mooted.

Mail.ru raised just under $1 billion with an IPO on November 3, and the stock has continued to rise since the initial listing.

“Right now investors are pretty enthusiastic about investing in Russian Internet companies, so it’s perhaps a good time for Yandex to try,” said Leonid Delitsin, an Internet analyst at Finam.

“It’s certainly a large amount but it could help Yandex become a truly international search engine,” he added.

Yandex is Russia’s largest search engine, accounting for over 60 per cent of searches, while major rivals Google lag behind because its searches in Cyrillic are not as effective as their English service.

The American giant has been improving its foreign service to close in on emerging markets, and analysts say the greatest returns are in Asia. “The idea of a truly worldwide search engine could be really attractive right now,” Delitsin said.

Yandex was the world’s seventh-biggest search engine in 2009, behind global leaders Google and Baidu, China’s largest search engine.

But Google’s battle with Chinese authorities over state censorhsip could pave the way for Yandex.

Opportunities also exist for growth at home, with Internet penetration one of the fastest-growing in the world. In 2010 it reached 29 per cent of the population, 10 per cent down on fellow BRIC Brazil, according to data from Comscore.

While stronger competition would impact Yandex’s hold on the market, it could boost revenues as advertisers on the Internet would react to the improved opportunities, Delitsin added.

The company had been mulling an IPO in 2008 on the Nasdaq, which would have raised between $500 million and $1 billion, but it was put on hold by the crisis. themoscownews.com