A new project for Runet web-analysts, called Infact.ru, has just been launched. It is non-commercial, and the main target is to spread accurate data on the Russian Internet market to the Western media.

This is a great initiative for those interested in Russian marketing and the guys behind this start-up are experts on the subject. I’d strongly recommend downloading their first report: InFact Russian internet Sping 2010 (PDF).

Yandex, the leading search engine in Russia has released their own branded version of the Chrome browser. It’s an interesting move to co-opt the browser technology associated with Google, and use it to further the Yandex brand.

Isn’t Chrome Licensed To Google?

Although Google holds trademarks on “Google Chrome” and “Chromium”, the terms “Chrome” or the Russian Cyrillic “Хром” seem fair game.

Both version of Chrome are based on the Chromium project. This project has an open source license on their software, which lets anyone make derivative projects as long as these are also freely distributed.

In turn the Chromium project took much of it’s intellectual property from the Open Source Mozilla platform, the engine behind Firefox. Key Mozilla employees are working with Google and Chromium while still contributing to Mozilla projects.

Why Have Yandex Done This?

It’s a smart marketing move. As Chrome builds in popularity in Russia, Yandex can take advantage of that brand. This is not the first time though that they have released branded software, they have teamed up with Firefox and ICQ available.

Also they may have diffused some of Google’s strategy if Chrome browser share increases. Both Google Chrome and Yandex Chrome seem to be similarly identified in analytics packages. By supporting the Chrome project they can distance it from the Google brand and share any market success.

How Does Chrome Perform in the Russian Market?

Compared to the US market, Chrome has achieved a similar or slightly better penetration into the Russian market. Matt Cutts shows Chrome figures in the states vary between 2.84% to 4%. LiveInternet suggests the browser has a 3.6% market share in Russia.

Russian Browser Penetration By Version

By specific browser version, Firefox 3 is the most commonly used with 22.7% market share. The Russian market is the best performing world-wide for Opera Software, who holds significant market share for their desktop browsers and mobile browser (Opera Mini).

Russian Browser Penetration By Brand

Technorati Tags: Chrome, Chromium, Firefox, Google, Russia, Yandex

Rossiiskaya Gazata reports that Internet advertising is continuing to take an ever larger share of the overall advertising market in Russia. Despite the economic downturn that has affected the overall spend.

Internet advertising in Russia grew by 6 percent in 2009, up to 19 billion roubles (approx. $630.6m USD), while the whole advertisement industry in 2009 was valued at 256 billion ($8.50 billion). This figure was down 27 percent on 2008.

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.

Kommersant reports that Yandex, Russia’s largest search engine, is considering purchasing AOL’s ICQ platform at more than $200m.

ICQ has between 40m-50m registered users worldwide with the majority in Germany, Russia, Israel and Eastern Europe. In December of 2009 AOL announced that they would be restructuring and selling off some of that assets, including the social network Bebo and ICQ.

Yandex and Rambler already cooporate with ICQ and have released their own branded versions of the popular messager client. According to IK “Finam”, ICQ revenues last year were between $30-40m. Yandex, according to their latest figures had total revenues in 2009 of 8.7b roubles (approx. $287.4m USD). The Russian market for contexual advertising is currently estimated to be 11.3b roubles (approx. $373.3m USD).

Sources close to the negotiation say that ICQ’s investors are looking for a figure around $200-250m (they paid $287m for the service in 1998 and have invested close to $120m in the platform since that time). However others feel this price is too high.

Tatiana Menkova, analyst at IK “Finam” believes the figure of $ 200 million for the company is overstated. On their assessment the company can cost a maximum of $60m. “If the amount required by AOL is too high, Yandex may well just continue to work with ICQ, or even start their own messenger,”

This point of view is echoed by Yandex’s press spokesperson, Ochir Mandjikov. He neither confirmed nor denied the information about the company’s participation in talks with AOL, saying that “the company is happy with the current cooperation with ICQ”.

Although many Russian users have registered accounts with ICQ the trend on the ground is to use alternative clients, which provide more functionality or allow users to access several chat networks at the same time.

In an attempt to retain marketshare ICQ often cuts access to their network from these unofficial clients. This upsets their users and each action from ICQ is followed by floods of complaints across Runet. As Svetlana Gladkova notes,

The major problem with AOL hoping to get the market share back to its official ICQ clients is that anyone who has ever tried both official ICQ clients and a deeply customizable and extendable with plugin client like Miranda will know that comparing the two is like comparing Internet Explorer to Firefox. Would you ever want to leave your Firefox with all your plugins and extensions and switch back to the rigid Internet Explorer?

I guess I know the answer and the answer is very similar for those who has been using unofficial – but much more powerful – clients with ICQ.

When I arrived in Russia 6 years ago, it was quite a surprise to find the Russians had adopted the Chinese Zodiac. From October onwards you see references to the coming animal sign all around; in advertising, promotions and products. It is very much part of the Russian New Year tradition. I guess this makes sense in a society that places the emphasis on New Year rather than Christmas.

2010 is the year of the Tiger. As you can see to the right here, even Ikea has joined in the fun and is offering a stuffed tiger toy at their store. It is considered lucky to give gifts that reference the upcoming animal sign to your friends and family so sales of these items are strong.

The reason I mention this tradition is to help you localise to the Russian market. Consider this as part of your web strategy – you may want to use the correct Zodiac animal in your branding or advertising. If you have goods that can be connected to the animal, even better. Any references to this, show that you understand Russian culture and help you make that connection with your audience.

And from me – have a good Christmas and New Year. May the year of the tiger be good for you, your family and your business!

The financial crisis has been hard on Russia, with direct foreign investment dropping 45% in the first half of 2009 to $6.1 billion. The economy is expected to shrink 8.5% this year and inflation is in double digits. Some commentators have even begun to refer to the “Bic” economies (Brazil, India, China) rather than the former “Bric”.

However, as BusinessWeek points out, the multinationals – “big, battle scarred companies, veterans of coups in Brazil and hyperinflation in Turkey” – are refusing to pull out.

Indeed John Deere, Unilever and HSBC have all begun major expansion into the country. The attraction? Disposable household income in Russia is 30% higher than Brazil’s, almost 4 times China’s and 10 times that of India.

“Among emerging markets, Russia has moved to the top of our list,” says Chief Executive Matthew E. Rubel. Even companies that have been beaten up in Russia, like BP and Ikea, say they’ll keep investing.

Russia is simply too big—and too rich—to ignore. Equities are surging, the bond market is picking up fast and brokers predict a mass return of Russian companies to international equity markets. In all “Russia Inc.” may attempt to raise nearly $100bn over two years.

The Kremlin’s $280 billion stimulus plan, fuelled by oil and gas money salted away in better times, is spurring demand. That’s a boon for companies such as Unilever, which reported “strong double digit growth” in Russia during the first half of the year. Russia Inc. is back on track and – once again – an essential market for investment.

** Atrium shopping center, Moscow by ppz one of the artists who release their work under a Creative Commons license at Flickr – thank you!

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

This week The Moscow Times has conducted a series of interviews on the state of e-marketing in Russia. Essential reading for anyone working in or considering expanding into RuNet. These should remain open to public viewing, follow the links below:

Changes in Consumer Preference on the Internet
By Inessa Ishunkina, Project director TNS Russia

RuNet of Today
By Vladimir Dolgov, Google Russia Country Manager

Opportunities and Challenges of E-Marketing in Russia
By Nick Wilsdon, CTO E3internet-Marketing

Linking Loyalty to the Customer
By Hanspeter Kipfer, Vice President Applications Oracle Eastern Europe and CIS

The Domain: Invader or Victim
By Anna Shmalyuk, Intellectual Property Specialist

Anti-Virus Software Is Not Enough
By Nick Rossiter, Regional Director Russia/CIS Symantec Corporation

It was a pleasure to be involved in this project and to see this topic getting the attention it deserves in the press here. Over the next week I’ll try and bring you some of the statistics mentioned in the articles.

Update: Added PDF copy of the articles for your reference

Technorati Tags: Domains, E-Marketing, Moscow Times, Russia

The Russian law “About the State Regulation of Activities on Gambling” comes into effect tomorrow, forcing many casinos to shut their doors. .

Although Vladimir Putin could not have foreseen the economic crisis when the law was proposed in 2006, the implementation could not have come at a worse time for Russia. An estimated 400’000 people work in the industry and the four designated ‘Las Vegas’ zones have not been built. Although Russia was flooded with new building sites in 2006, many of these have come to a halt due to a lack of finance.

In addition, the immigration quotas have been now been halved to deal with rising unemployment in the country. This has sent many CIS workers central to the building industry back to their countries of origin. Although we have seen some economic recovery this summer, tied to the rising value of commodities, it is unlikely these super-zones will be operational soon.

As I wrote back in March, some of this casinos will try to turn themselves into private poker clubs, taking advantage of reclassification of poker as a sport. However this law will inevitably push more casinos to move online and intensify the competition there.

Technorati Tags: casinos, law, poker, Russia