What a difference a war makes.
Just a few months ago, Yandex stood out as a rare Russian business success story, which had grown from a small start-up to a tech behemoth that not only dominated search and driving across Russia, but also had a growing global reach.
A Yandex app can hail a taxi in distant cities like Abidjan, Ivory Coast; Oslo, Norway; or Tashkent, Uzbekistan; and the company delivered groceries in London, Paris and Tel Aviv. Fifty experimental Yandex robots drove across the Ohio State University campus in Columbus, bringing Grubhub food orders to students — with plans to expand to some 250 U.S. campuses.
Often referred to as “Russia’s coolest company,” Yandex employed more than 18,000 people; the founders were billionaires; and at its peak last November, it was worth more than $31 billion. Then President Vladimir V. Putin of Russia invaded Ukraine.
Almost overnight, as Western investors left Russia and Western governments imposed harsh economic sanctions, the value fell to less than $7 billion. The Nasdaq exchange has suspended trading in its shares.
The sudden aversion to most Russian business led the company to close several international companies, including the delivery services in London, Paris and Columbus.
Thousands of workers —almost one-sixth of the total — fled the country. Its founder, Arkady Volozh, and his top deputy stepped aside after the European Union imposed sanctions on both, accusing them of complicity in Kremlin disinformation.
The company is not facing insolvency. But the sudden change of fortune doesn’t just serve as a warning to investors in an authoritarian country dependent on the whims of a single ruler. Yandex also symbolizes the problems Russian companies face in a radically changed economic landscape and the growing divisions about war in society as a whole.
Yandex was founded as an internet search engine before Google, offering numerous services including e-commerce, maps, music streaming, cloud storage and self-driving cars. Foreign investors loved it, and for Russians it was a virtual ghost – a combination of Google, Uber, Amazon and Spotify in one. But the company had an Achilles heel, one that remained hidden until the invasion of Ukraine.
Its success as a search engine and service provider, like that of Google and other social media giants, is based on public trust. Before the war, about 50 million Russians visited the homepage every day, where a list of the top five headlines was an important source of information for many.
Understanding the war between Russia and Ukraine better
Executives at Yandex and its users had come to accept the Kremlin’s curation of news sources, but viewed it as a limited part of a sprawling, pioneering tech empire. However, with the Kremlin’s invasion and crackdown on any public discussion of the war, Yandex quickly became the butt of jokes.
Online, some users have mocked the long-standing slogan “Yandex. You can find anything,” such as “Yandex. You can find anything but the truth” or “Yandex. You can find anything but a conscience.”
“Yandex was like an island of freedom in Russia, and I don’t know how it can last,” said Elena Bunina, a math professor whose five-year tenure as CEO of Yandex ended in April when she emigrated to Israel.
Interviews with 10 former and current Yandex employees reveal a portrait of a company caught between two incompatible requirements. On the one hand, it must meet the demands of a Kremlin determined to stifle any opposition to what it disguises as its “special military operation” in Ukraine. On the other hand, Western governments, investors and partners are shocked by the war in Russia, as are the more secular segments of their own Russian public.
“They have to find a way between these two, and it’s kind of impossible,” said Ilia Krasilshchik, who resigned from running Yandex Lavka, the fast grocery delivery service, after she was charged with posting pictures of it. massacre in Bucha by Russian troops. † “In any other situation, it would be a perfect company, like Google, just like any other technology company. But Yandex has a problem because it is a Russian company.”
It was founded in 1997 by two mathematicians and has long claimed that it generates about 60 percent of Internet searches in Russia. (Google has about 35 percent, Dr. Bunina said.)
Before Yandex, Russian taxis consisted of random drivers trying to earn a few rubles. Uber tried to conquer the market, but eventually gave in and partnered with Yandex in Russia and numerous former Soviet states. Yandex Taxi has expanded to about 20 countries.
Like many successful companies in Russia, especially those involved in news of any form, Yandex quickly caught the attention of the Kremlin. Mr Putin’s image keepers inevitably noted that the company’s aggregator, Yandex.News, regularly criticized Mr Putin. During street protests in 2011 and 2012, and then the attacks on Crimea and eastern Ukraine in 2014, Kremlin officials tried to edit the list of acceptable news sources and sometimes even individual headlines.
Yandex tried to push back by explaining that an algorithm automatically generated the list from thousands of sources based on popularity.
“Since 2014, the pressure has increased on us and we have done everything we can to maintain a neutral role,” John W. Boynton, an American entrepreneur and the chairman of the board, said in an interview in June. “We don’t get involved in politics, we never wanted to.”
But Yandex was too big not to get caught up in politics, and the Kremlin continued to undermine its independence. New laws forced news aggregators and search engines to use officially approved sources, while the government gained more control over the company’s management structure.
“They just made it easier to pull the strings when they wanted to,” said Esther Dyson, one of two Americans who resigned when the war started. It became clear that the Kremlin was “moving further towards full control,” she said.
After the February 24 invasion, Mr. Putin quickly signed a law making it a crime to spread “fake news” about the military, with prison terms of up to 15 years and hefty fines. What had been a manageable problem, fighting off the Kremlin while maintaining its image of independence, suddenly turned into a crisis.
For users like Tonia Samsonova, a tech entrepreneur who sold her start-up to Yandex for several million dollars but was still running it, the impact was shocking. After reading an online story from a British newspaper that the Kremlin had put the country’s nuclear forces on edge, she checked the headlines on Yandex.
There she found a bland story from a state-run agency about “deterrent” powers. Alarmed, she texted several Yandex executives to suggest it would bring news that would spark opposition to the war; that elicited a firm “No,” she said.
Ms. Samsonova then posted her handwritten letter of resignation to Instagram, accusing the company of concealing civilian deaths committed by the Russian military.
“It’s not accurate by design and management knows it,” Ms. Samsonova said in an interview. “It’s a crime to keep doing that while your country is invading another country.”
In its first sanctions against a top executive, the EU cited online allegations of disinformation by a former head of Yandex.News.
The company responded to allegations that it was spreading misinformation by saying that Russian law has tied its hands and that it wanted to preserve the livelihoods of its employees and the interests of its investors.
Well aware that the government had seized control of another social media giant, VKontakte, Facebook’s equivalent, Yandex executives are proceeding cautiously, concerned about a similar nationalization.
Faced with internal questions, Dr. Bunina told workers at a weekly company forum shortly after the war started that it would take about 10 minutes to put independent news on the homepage, would make no difference and might end Yandex because she knew it. .
Executives believed that as long as they checked the Yandex search engine, users could find credible news about the war from abroad, she said, pointing out that Russia was not yet China.
But that turned out to be much too optimistic. The company soon announced that it would split off Yandex.News and Yandex.Zen, a type of blogging platform that had angered the government as a major means of distributing videos that Mr. Navalny regularly produced to expose the Kremlin’s corruption. to denounce.
For now, Yandex executives say their main concern is to keep innovating while keeping the heart of the company in Russia, cut off from most western technology.
“Since the war, we have halted all our initiatives to discontinue our services worldwide,” said Mr Boynton.
About 2,500 workers who have left Russia are staying out, said Dr. Bunina, and the pace of departure from the company is accelerating.
Yandex is further plagued by a growing gap between the workers who have stayed in Russia and those outside it, which makes even conversation difficult, let alone collaboration. Those inside fearfully refuse to discuss the war or the world, clinging to IT, while those who left in disgust often want nothing more to do with their homeland.
“Whether you leave or stay, these are such different worlds right now, so you won’t understand each other,” said Mr. Krasilshchik. “This is not just about Yandex, Yandex is like the country in miniature.”
Alina Lobzina reporting contributed.
