Wall Street's all abuzz over a Russian IPO. This morning, Russian Internet portal Yandex
But is all this excitement for naught?
I'm sure this IPO is good news for the bankers, and Goldman's doubly sure. It recently doubled down on Russia, investing "more than $1 billion" in Mail.ru Group and Tinkoff Credit Systems. But the biggest beneficiary of Russian Internet growth could be Silicon Valley's Google
According to a recent report commissioned by Google, Russia's Internet economy is set for a multiyear, 30% annual growth boom as it surges from a reported 1.6% share of the Russian economy to as much as 3.7% by 2015. The Internet advertising in which Google and Yandex specialize has been one of the zippiest segments of the market, posting 59% annual growth from 2005 through 2009. Yet even today, Russian companies spend barely 12% of their ad dollars online, versus online's 18% share of the ad market in the U.S., and 25% in Britain.
Google bears will doubtless point to the example of its inglorious defeat by Baidu
If Russia truly wants to grow its Internet economy, and state-sponsorship projects like Skolkovo don't do the trick, then it'll have to import innovation from abroad. Google can help with that. That's why I think it has a future in Russia still -- Yandex or no Yandex.
Who will win this contest -- foreign Google, or hometown hero Yandex? Add both stocks to your Fool Watchlist, and watch the battle play out.