New to Russia, Google is struggling

The NY Times is carrying an article on Google’s lack of progress in Russia to date. Like the Chinese market, this is area which is dominated by the local players.

“Google promised they would destroy everything, but look at where they are,” said Irina Gofman, chief executive of Rambler Media, one of Google’s Internet portal and search service rivals in Russia. “They are not that big.”

The main engine in Russia is Yandex, which the NYTimes reports is visited by 64 percent of Internet users; Mail.ru, an e-mail service, came in second at 56 percent, and Rambler was third at 53 percent.

But even in its share of revenue from ads linked to searches, the lucrative Internet business model pioneered by Google, the company lags. Yandex controls 50 percent of the Russian market for such ads, according to analysts at ING, a Dutch bank. Rambler is second with 41 percent and all other companies, including Google, fight over the remaining 9 percent.

The main issue for Google, and the strength of the local players lies in their complex understanding of the language.

“Our understanding of Russian was not as good as we wanted it to be,” said Kannan Pashupathy, head of international engineering at Google. Google revamped its Russian site last week, Mr. Pashupathy said, improving its ability to deal with Russian, a complex language in which nouns may be one of three genders and be declined in up to six cases.

It’s also worth noting that Yandex in particular have been in overdrive these last few years to develop many of the services which Google have pioneered, such as Yandex Maps, Desktop search, Yandex Direct (contexual ad system), Yandex Money (PayPal type system) and a serious blogging/community (Web 2.0) and news platform.

However the resources at Google’s disposal give them more than a fighting chance to catch up, as Multilingual Search’s very own managing editor writes:

“Of course they can fix the problems,” said Andy Atkins-Krüger, managing director at Web Certain Europe, a firm in York, England, that specializes in organizing search-based marketing campaigns in multiple languages. “But Yandex and Rambler aren’t going to stand still.”

Nick Wilsdon

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6 Responses to New to Russia, Google is struggling

  1. Nick Wilsdon says:

    Sorry for the delay in answering this, I hope you have all had a good Christmas. I’m looking forward to my second Russian one ;)

    Yes ‘pioneered’ probably wasn’t a good term to use there. I had meant that in the sense that Google was the first to start rolling out extra services to compliment or expand on search. I stand corrected though by Itman (who I know has a lot of knowledge in this area) that Yandex had started some of these services before Google.

    I’ve always seen that as one of the key strengths of Yandex and Google, and not focused on by Yahoo or Rambler.

    Google has made some steps forward though, in accepting bank transfers in roubles (as Maxime points out). This was a major oversight on their part in the Russian market and something they need to expand on. CC distribution is still limited, especially outside Moscow.

    It has been great to see the banks pushing out Visa Electron cards but unfortunately these are currently bared from online purchases. On a personal note, we have also found it impossible to get a company credit card.

  2. Maxime says:

    I guess, rusian lingustic is mainly affects the part of search queries share in Russia, where Google is 3rd, or even 2nd already and going up step by step now. But for ads market the main problem for Google is accepting/making payments from/to local companies and individuals in easy and fast form. I got see local ads in AdSense (placed by local company and binded to local services) just few days after Google began accepting payments by bank transfers in roubles (local currency in Russia). As for today Google doesn’t accept/pay in any local e-currency (like PayPal) here in Russia, while Yandex and Rambler does.

  3. Itman says:

    … and the thesis of Google working hard to be like Yandex fits well the title of Nick’s article. :-)

  4. Itman says:

    > A careful read of the paragraph shows Nick was describing how Yandex is working hard to ensure they provide the same services as Google does and are therefore eliminating any advantage Google could have had.

    I would disagree on this point too. It does work hard to recreate all the best, but some important services, e.g. web-mail, blogsearch were started by Yandex before Google did that. If we take a closer look we see that it is the Google that works hard to provide the same services as Yandex. I mean localized version. It is less than a year when Google can conjugate and incline Russian words, the Russian spellchecker and Russian version of Google News became working only several weeks ago. And such an important service as Google maps still have a zero localization.

  5. Nick was using PayPal to describe what Yandex Money is, he wasn’t claiming that Google Pioneered it!

    A careful read of the paragraph shows Nick was describing how Yandex is working hard to ensure they provide the same services as Google does and are therefore eliminating any advantage Google could have had. I don’t think he is claiming Google invented all those systems, though I do agree that the word ‘pioneered’ was probably not the best choice for that section.

  6. Itman says:

    Hi, Google haven’t pioneered paypal. Neither was it an inventor of CPC mode, on-line maps and blogs.

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