Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Can Yandex Help Facebook in Russia?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Facebook (NASDAQ: FB  ) is finally playing nice with Russian search company Yandex (NASDAQ: YNDX  ) after the social network company blocked the latter's social search app, Wonder, last year. Yandex is bigger than Google (NASDAQ: GOOGL  ) in Russia, commanding over 60% of the market.

On Tuesday, the two companies announced an agreement to incorporate Facebook's public data into Yandex's search results. The move is mutually beneficial, and should help Facebook improve its traction in Russia.

Facebook in Russia
Facebook faces tough competition in Russia. It's even gone so far as mentioning its competition by name in its 10-K: vKontakte and Odnoklassniki. vKontakte attracts the bulk of Russia's social media users with additional features like file sharing.

Russia, one of the BRIC countries, is an important market for web companies. Its 72 million Internet users is bigger than any other European country. Its growth rate is the second fastest in the region after Italy.

Facebook was just the 12th most visited site in the country at the end of 2012. Google took third, but still trails Yandex. Alexa ranks both, the home of vKontakte, and ahead of Facebook in its most recent rankings.

The deal with Yandex should help, as the country's most popular website should funnel more users to the American social network. Facebook will now be better represented in Yandex's blog search -- which indexes blogs, microblogs, and social networks -- and the plan is for Yandex to eventually incorporate Facebook data into its main search results as well.

Note, this doesn't give Facebook an advantage over its rivals. It simply puts it on the same playing field, as Yandex already gathers data from and Twitter. As Facebook continually improves its product, and vKontakte faces legal pressure due to its file-sharing capabilities, the added exposure should help attract new users.

Yandex's product gets better
As I mentioned previously, Yandex already has a lead over Google in Russia's rapidly growing web search market. The local company has over 60% of the market, whereas Google takes just 26%.

This deal with Facebook is indicative of a major way Yandex differentiates itself from the global search giant. As Yandex points out in a blog post regarding the agreement, the company doesn't "compete with anybody in the sphere of social networks; instead [it] seek[s] to collaborate with all the players."

Google, on the other hand, is practically a direct competitor with Facebook with Google Plus and its ad network. The two companies held a long detente over Google's ad network playing nicely with Facebook's ad exchange. Additionally, it's expected that Facebook will compete directly with Google's ad network with an external ad service of its own. Twitter already has such a product.

Google may have a bias against sending traffic to other social networks over its own, but Yandex doesn't care. Facebook data will help Yandex create a better product by producing more accurate and relevant search results, while Google neglects Facebook and Twitter.

As more people use social networks to share important news and interest pieces, Yandex is becoming a central hub for all of that information, and is creating technology to organize it and allow easy access.

The company blog points out that Yandex could:

allow a user to find an old friend without having to register on every single social network one after another. It would also allow a user to tap in to all the discussions of some interesting event all together in one place

The addition of the world's most popular social network will help achieve this goal.

Emerging a winner
Emerging markets like Russia are a great place to find growth companies like Yandex, but represent opportunities for established companies like Facebook as well. The deal with Yandex is just one of several agreements Facebook has made with local companies outside of the U.S.

Facebook has made numerous deals with foreign wireless carriers to allow subscribers easier access to its site. These deals are generally mutually beneficial providing the local company with an advantage and Facebook with more traffic.

All social-media investors should know this company
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 15, 2014, at 12:23 PM, Kasper wrote:

    i think nobody can help facebook in Russia (and in some other part of the world). it has the worst user-interface and a lot of ads! sorry guys, but it's true.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2795813, ~/Articles/ArticleHandler.aspx, 8/28/2015 11:15:07 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Adam Levy

Adam has been writing for The Motley Fool since 2012 covering consumer goods and technology companies. He spends about as much time thinking about Facebook and Twitter's businesses as he does using their products. For some lighthearted stock commentary and occasional St. Louis Cardinal mania

Today's Market

updated Moments ago Sponsored by:
DOW 16,581.44 -73.33 -0.44%
S&P 500 1,985.73 -1.93 -0.10%
NASD 4,805.53 -7.18 -0.15%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 11:00 AM
FB $90.76 Up +1.03 +1.15%
Facebook CAPS Rating: ***
GOOGL $656.89 Down -11.07 -1.66%
Google (A shares) CAPS Rating: ****
YNDX $12.17 Up +0.09 +0.75%
Yandex CAPS Rating: ****