'Russia's Google' Yandex to relocate amid mounting impact of sanctions

Yandex is aiming to move its new technologies outside Russia and sell established businesses, including internet browsers, food delivery apps, and tax-hailing apps

Internet giant Yandex NV, also known as "Russia's Google", is planning to cut its ties with the country to protect itself from the fallout of the war in Ukraine. According to a report by the New York Times (NYT), this is a setback for Russia's President Vladimir Putin's efforts to develop domestic substitutes for western internet giants. 

The Financial Times (FT), on Thursday reported that Yandex has "informally" listed Alexei Kudrin to win Putin's approval for the sale of its operations in Russia. Kudrin is Russia's chief government auditor and is believed to be close to Putin. 

He is expected to meet Putin this week. 

People familiar with the matter told NYT that the company is planning to move its new technologies outside Russia and sell the established businesses, mainly internet browsers, food delivery apps and tax-hailing apps.

Economic consequences of the sanctions imposed on Russia have forced thousands of Yandex employees to flee the country. In just over a year, the market cap of the company has fallen from $30 billion to $6.8 billion on Nasdaq.

The war has also reportedly made the development of new technologies like self-driving cars, machine learning and cloud services unviable and too costly. All these industries require western experts and technology. The sanctions have made procuring them difficult. 

Apart from difficulties in obtaining the Kremlin's approval, the company will also have to find buyers for its Russia operations. The restructuring plan will then have to be approved by the shareholders of the company. 

In August, Yandex sold its news aggregator which was "filled with state propaganda" because of "draconian Russian media laws that bar criticism of the war".

FT also reported that Arkady Volozh, the company’s founder, who lives in Israel, is horrified by the war and has not returned to Russia since it began in February. In June, he was sanctioned by the European Union (EU) for "promoting state media and narratives in its search results". Volozh resigned as the CEO of the company and transferred his voting rights to the board.