Russian internet major Yandex (anchor service Runet's largest search engine) is negotiating partnerships with Facebook, Vedomosti daily reports, citing unnamed sources close to the company.
The two companies are said to be in early negotiation state for jointly promoting various services by Yandex and swapping user data, the paper reported on June 5.
Facebook is interested in online services popular in Russia, such as ordering taxis, online shopping, cinema, airline, hotel, and other booking services.
Yandex could team up with world's largest social network in these fields and provide existing services such as Yandex.Taxi, Yandex.Market, Yandex.Afisha, etc to Facebook users.
Another major synergy would be joining the marketing efforts in such fields as hyperlocal targeting, mobile markets, as well as merging user data sets.
Notably, this would allow Yandex to leverage Facebook's mobile device penetration to catch up with mobile reach of its closest competitor Google, which promotes services through the reach of Google Android platform on mobile devices.
"We think that cooperation with Facebook is an attractive opportunity for Yandex, especially as it should help it gain access to the social network's mobile audience," Sberbank CIB commented on June 6.
This situation could be tackled by Yandex by getting access to Facebook's mobile app, one of the top thee most used apps in Russia along with Whatsapp messenger and Google's Chrome browser, Vedomosti notes, citing data of Kleiner Perkins Caufield & Byers.
While rival domestic social networks VKontakte and Odnoklassniki had 48mn and 32mn monthly users in April, Facebook still has a prime audience of 23mn, Sberbank notes.
The total number of Facebook users in Russia of 12.6mn is notably smaller than 20.4n users of Yandex, while in Moscow and St Petersburg there is a strong overlap between the two groups.
Advertising executives surveyed by Vedomosti welcome the possible cooperation between Facebook and Yandex, noting that local advertisers and marketers would get a data boost on the user population, improving both the volume and the variety of the information available.
At the same time, sharing user date, including one of the most in-demand tools of cross-device targeting, should improve the quality of targeting for both Facebook and Yandex, Sberbank stressed.
Yandex, the anchor service Runet's main search engine, on April 28 reported net profit decline of 50% in the first quarter of 2016 to RUB1.1bn, while posting strong growth in many areas.
The loss was attributed to currency losses, and the company's adjusted net profit showed a 41% y/y increase to RUB3.2bn.
Revenues gained a strong 34% y/y to RUB16.5bn in the reporting quarter, with adjusted Ebitda jumping by 62% to RUB5.8bn. Revenues from advertising advanced 31% to RUB15.8bn.
Revenue growth was 7% above the consensus forecast and 5% above VTB Capital's expectations, while Ebitda beat the investment bank's forecasts by 23% and 20%, respectively.
"Yandex had a good start of 2016 and we are starting to see signs of improvement in the economy," the company's CEO Arkady Volozha commented.
Due to the more favourable environment, the management upgraded the outlook on revenue growth for 2016 from previous 12-18% to 15-19%.
"Given the strong trends in 1Q16 we see even the updated guidance as fairly conservative," VTB Bank said, noting that first quarter numbers revealed strong growth trends in new business units.
|Yandex - KEY METRICS|
|Financials, $ mln|
|EPS (adj), $||1.13||0.63||0.54||0.65|
|Valuation, Gearing and Yield|
|Founders and senior management||10.90%|
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