Yandex, considered by many to be the Russian-language Google, has announced a flourishing set of financials. Revenues for the whole of 2012 rose to $947 million, which was 44% more than 2011.
Adjusted net income proved to be similarly bountiful for what’s one of Europe’s largest internet companies. It almost doubled over the 12 months of 2012 to $288.7 million, a 46% increase on 2011.
Expenses, related to the acquisition of mobile software business, SPB Software, were included as part of Yandex’ adjusted net income. Gains from the sale of the company’s equity investments also formed part of the full-year income figure.
High Growth in Russia
Russia was, and still is, a high growth market. Yandex’s reported 61% share of the country’s search market, according to LiveInternet.ru, makes it well positioned to take advantage of any gains to come in 2013.
Advertisers are being attracted to Yandex’ marketing platform in their droves. Its clients grew by 22% from Q4 2011 to 213,000 in Q4 2012. The 26% increase in search queries from Q4 2011 won’t have harmed its pulling power.
The influx of advertisers has spurred Yandex’s text-based advertising revenue from its own websites on to a 40% increase from Q4 2011. A similar 41% rise came from text-based advertising on the company’s own advertising network.
Over-Reliance on Text-Based Advertising?
One warning sign could be the firm’s over-reliance on text-based advertising for its revenue. Yandex reported that its text-based advertising activities contributed to 87% of total revenues in Q4 2012.
Yandex’s 26% increase in paid clicks in Q4 2012 from Q4 2011 showed that it wasn’t placing all its eggs in one basket just yet. The average cost per click in Q4 2012 increased 11% compared with Q4 2011.
Display advertising revenue, whilst still above the 4% market growth, didn’t make the kind of gains experienced elsewhere in Yandex. There was just a 12% increase on the figures announced in Q4 2011.
As for 2013, Yandex revealed that it had high hopes for the year ahead. It expects to achieve full-year ruble-based revenue growth of 28-32% on a like-for-like basis.