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Yandex Considering $200m ICQ Purchase

yandex logo Yandex Signs Deal With BingKommersant 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.

About Nick Wilsdon

Nick Wilsdon works as a Content and Digital Strategy Consultant He manages online campaigns for the UK's leading telecom, finance and FMCG brands.

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