After negotiations last year, Google won the contract away from Yandex to provide Mail.ru with contextual and organic search results. However, it’s become clear that instead of a transition from Yandex to Google, Mail.ru seems to have decided to go it alone and use results from their own in-house search engine Gogo.ru.

This shouldn’t be too surprising. As I noted back in December, Mail.ru always had aspirations to enter the search market with their own technology. In one move they have managed to make Gogo.ru the third largest search engine in Runet with 9.1% market share.

Google still has the contract for their contexual results which makes Mail.ru their largest Russian publisher but it seems the plucky engine has decided that they need to carve their own place in the market. Google should look out for signs of them developing their own contexual system.

As my friend Svetlana Gladkova points out, the initial deal may have been to keep Google organic results as a backup plan while they tested Gogo.ru under pressure. Now the tests have been successful they have no reason to use Google results.

So Yandex loses the extra market share that Mail.ru provides but importantly to them, Google makes little ground on this deal. Yandex will keep their position as market leader with a comfortable 55% against Google’s 30%.

Time will tell if Mail.ru market share continues to climb. On historical evidence, Gogo.ru was not well received by Russian users with a market share of 0.3% at it’s peak in July 08 which tailed off to 0% for the last 9 months. Mail.ru is giving their search platform exposure but if the results are poor it may prove a risky strategy.

Last week rumours of a potential Mail.ru/Google deal hit Runet. Although Google previously held a deal to provide organic and contexual advertising to the engine for 2003-2005. They lost this contract to Yandex at the end of 2005. Mail.ru confirmed the deal this morning.

Mail.ru is a rising star in Runet. It has built marketshare to 10% and replaced Rambler as the third largest search engine in Runet. Google currently holds 30% against market leader Yandex with 53% (63% incl. Mail.ru results). This move effectively takes Google to 40% market share.

However this is probably only a temporary win for Google. The issue at the heart of the Yandex/Mail.ru split is the refusal from Mail.ru to brand their results as being powered by Yandex. The Russian search giant was reported to be unhappy with Mail.ru promoting their search technology as their own. Subsequently Google has won back the deal by agreeing to provide the engine with unbranded results.

Why is this important to Mail.ru? Well, Mail.ru have their own search aspirations. They have already developed a mobile search application and invested in their own search platform, GoGo.ru. So far the technology has not been a success, barely registering on market-share charts but they clearly want to head in this direction. As their press release states,

…Mail.Ru plans to actively develop its own search technology. The search “engine” will be used without mentioning the Google brand. Mail.Ru will be able to handle the requests of users using its own technology, in order to test and further improve their development, and as a consequence – the [search] product as a whole.

So count down the days until Mail.ru decides to dump both the search giants and go it alone. When 98% of Google’s revenue comes by the way of advertising, it makes sense to develop your own technology to capture that income stream.

ComScore has released a study of the global search market showing that more than 113 billion searches were conducted in July 2009, representing a 41% increase versus year ago. As expected Google was No.1 with 76.7 billion searches conducted, or 67.5% global market share. However the Russian portal, Yandex showed the fastest rate of growth with 94% more searches than July 08.

LiveInternet, the Russian statistics site also gives positive news for Yandex, showing that they hold 51% market share against Google’s 30%. This figure is boosted by the continued rise of Mail.ru (10%), who uses Yandex search results to power their portal.

My friend Andy Atkins-Krüger has written an excellent summary today on why Yandex is doing so well (SearchEngineWatch.com).

Technorati Tags: ComScore, Google, Mail.ru, Yandex