The founder of the Russian search engine Yandex and the former CEO, Arkady Volozh, who has been living in Israel for several years, is currently negotiating the control rights of the international company in exchange for the transfer of some of the activities to a control group outside the Russian company, according to the independent Russian news website De Bell ( According to the report, Volozh, who resigned from the company following the personal sanctions imposed on him in June, is interested in moving some activities from Yandex outside of Russia and under his management, and apparently this is an activity that is currently being built, among other things, in Israel. He is expected to be assisted by several managers from the Russian company In the areas of the cloud and the autonomous vehicle that have come to Israel in recent months.
After the outbreak of the war in Ukraine, the management of Yandex was divided into two camps: those who chose to stay in Russia and prefer a Russian Yandex with Russian control and identity, and those who left. Among those who followed Volozh to Israel are Elena Bonina, former CEO of Yandex Russia; head of maps Roman Chernin; head of all autonomous vehicles Dmitri Polishchuk; and director of advertising products Vera Lazerovich. They are expected to help Volozh manage from Israel and from other countries international development activity of cloud computing, maps, autonomous driving and educational ventures through the new foreign Russian company.
According to the report in “De Bell”, there is no intention of an unequivocal split between Russian and non-Russian activities, but simply to develop four areas outside of Russia: autonomous driving, the cloud, the artificial intelligence training application “Toluca” and the “Practicum” training program, which brings hundreds of interns to Israel Russians every year. According to one of the plans proposed, the retail activity of Yandex: the taxi application Yango and the delivery service Yango Deli, which are popular in Israel, is expected to remain in Russian hands, as well as the search engine – the first product developed by the company.
Danny Freelander / Photo: Courtesy of the Cisco Israel Innovation Division
The fate of taxis and deliveries in Israel is unclear
Because of this, the fate of the taxi and delivery services in Israel has not yet been determined and is apparently subject to negotiations between the parties – these can remain with the Russian company, or be sold to a local franchisee who will operate the services using Russian technology using local servers. As of today, the user data of Yango Taxis and Yango Deli are stored in Yandex’s server farm in Finland and in May the electricity was even cut off due to the decision of a private Finnish electricity company. Since then it has been operating on the basis of a diesel generator.
One of the main controversies revolves around the bond holders of Yandex, who almost became insolvent in the first months of the war. In June, they agreed to change the debt structure, which brought back to the table the negotiations on organizational change and a new distribution of the shares, aimed at removing the voting rights and control of Volozh from the Russian company entirely. Volozh left the company with 48.4% of the voting rights (now he has 45.3%), which he transferred to a family trust with a promise not to sell them for at least two years. Together with the management of Yandex, the national “Public Interest Fund” continues to control 57.7% of the voting rights. No response to the news was received from Yandex.
Danny Freelander / Photo: Courtesy of the Cisco Israel Innovation Division
At the same time, according to the report, at this stage there is no final decision on how the company will be split. The discussions concern not only the distribution of the controlling shares of Vologe – which wishes to receive activities from the company in order to give up the controlling shares – but also the manner in which development teams will be separated from the parent company, and under what conditions they will be separated.
A series of beatings after the invasion of Ukraine
In the Western countries, Yandex has suffered blow after blow since the outbreak of the war in Ukraine: its news service – which filtered news about the war in Russia to Russian speakers – was sanctioned by the European Union until Yandex decided to sell it to the Russian social network VK; Its grocery services, Yango Deli, as well as Yango taxi services, were blocked by the Baltic states and withdrawn from Western European countries such as the UK and France; In the US, collaborations with its delivery robot on academic campuses were terminated; and in Finland, as mentioned, the electricity supply to Yandex’s only server outside of Russia was terminated.
In Israel, Yandex is well-known thanks to retail services for the private consumer such as Yango Bucket, the express grocery delivery service, Wind’s fleet of electric scooters and the Yango taxi service. Nevertheless, even in Israel, Yandex’s conduct began to be criticized through opposition among members of the Knesset to moving the company’s headquarters to Israel, or opposition in the Tel Aviv municipality to conducting trials of its delivery robots on its streets.
In the US, trading in Yandex stock was stopped already with the outbreak of the war, and recently the Russian parliament passed a law prohibiting trading of shares of Russian companies on foreign exchanges. The European Union imposed sanctions on individuals in Yandex, the latest of which is Volozh himself who, as mentioned, retired from his managerial positions as CEO and founder and remains a member board of directors and shareholder. He was preceded by Deputy CEO Tigran Khodvardyan, who resigned in March following sanctions imposed on him by the Union after it became clear that the company’s news division was engaged in filtering content from the battlefield in favor of the Russian narrative. Last month, Khodvardyan filed a lawsuit in the court of the Union, against the sanctions. After his retirement, he sold Yandex handed over the division to the Russian social network VK, which is currently controlled by elements close to the Kremlin.
The end of the dream about Yandex International
According to “De Bell”, the war put an end to Volozh’s ambition to build Yandex as an international company. Some of the projects in the Russian company, such as smart cars, will initially be destined for the West. In the field of unmanned vehicles – there are electronic components and processors that can no longer be obtained in the Russian industry due to the sanctions.
It was also reported that as part of the discussions the structure of the company may change: currently the Russian company is subordinate to a Dutch company called Yandex Ann. V. And after the split, the Russian business entity may be under other owners or another parent company.
The Kremlin is no stranger to all these moves and must agree to such a deal. Volozh has asked the former Finance Minister, who is very close to Putin, Alexei Kudrin, to mediate these efforts and he may even enjoy a role in the future administration if these efforts bear fruit.
The agreement with the Kremlin and the gold stock
The last significant organizational change in the company occurred in 2019 after a conflict with Sberbank, which wanted to become a significant shareholder in order to increase the connection between the Yandex ecosystem and the bank’s services. Since 2009, Sberbank has held a gold share that it purchased for a symbolic one euro. This allowed the National Bank to block any purchase of more than 25% of the company’s shares or voting rights – by any existing shareholder or third party. For the state, the mechanism served as an insurance certificate against foreign control.
Sberbank’s vision did not succeed and in 2019 the bank withdrew from the company and the gold stock was deleted, but at the same time Yandex reached an agreement with the Kremlin on a new control structure. A new gold share in the Dutch parent company Yandex Ann. V. was awarded to a special fund called the “Public Interest Fund” – and with its help she received the right to block any transaction over 10% of the shares and to appoint two directors in the company.
Among the foundation’s founders – representatives of five universities, the Skolkovo School of Management – the government R&D company and the Russian Union of Industrialists and Entrepreneurs. Its management includes close associates of the authorities such as Alexander Dyukov, the chairman of Gazprom Neft and Elena Shmelva, the head of the Sirius Gifted Center, founded by Putin’s associate , the cellist Sergey Roldugin. Among the controlling owners of the Dutch company are many American investors including T Rowe, Fidelity, Invesco and Euro-Pacific.
In the second quarter of 2022, Yandex reported revenues that amounted to $1.93 billion, a jump of 43% compared to revenues totaling $1.33 billion in the corresponding quarter last year. The sales turnover of the taxi sector (how much the company makes before transferring a share to the drivers) amounted to 2.94 billion dollars, an increase of 29% compared to the corresponding quarter. The sales turnover of the retail and delivery sector reached 964 million dollars, an increase of 67% compared to last year.