Tech Giant Yandex, Battered By
Wartime Censorship, Reorganizes, Moves To Leave Russia
November 30, 2022
Russian tech giant Yandex has said it is reorganizing its operations,
moving to cut its ties with Russia in a restructuring that solidifies
government control over a company once seen as a bellwether for the
country's digital economy.
The announcement comes after months of internal turmoil, with executives
departing, the sale of the two of the company's best-known products, and
company shares hitting basement prices prior to being frozen on
international stock exchanges.
"These are exceptionally challenging times," John Boynton, chairman of
Yandex's board of directors, said in a statement released late on
According to the online news site The Bell, which was first to report on
the reorganization, Yandex's parent company, which is headquartered in
the Netherlands, will lose ownership and control of all businesses of
the Yandex Group.
A new, Russian-incorporated company will take over those operations,
with a new board headed by Aleksei Kudrin, a longtime confidant of
President Vladimir Putin who currently heads the Audit Chamber, a
government fiscal watchdog.
The Bell said Kudrin met with Putin November 25, and that Kudrin would
receive 5 percent of shares in the newly reorganized entity. On November
25, hours before the company statement, the state news agency RIA
Novosti reported that Kudrin intended to leave the Audit Chamber before
year's end, and join Yandex.
The deal also called for Vladimir Potanin, a billionaire oligarch whose
fortune comes from ownership of metals giant Norilsk Nickel, to take a
minority position, The Bell said.
In its statement, Yandex said it had "commenced a strategic process to
review options to restructure the group's ownership and governance in
light of the current geopolitical environment."
"The board anticipates that Yandex N.V. will in due course be renamed,
with the business to be divested retaining exclusive rights for the use
of the Yandex brand," it said, adding that shareholders must approve any
Under the reorganization, founder Arkady Volozh, who left Russia after
the invasion and now lives in Israel, will retain some licensing rights
to develop Yandex-originated ventures outside of Russia.
A combination of Google, Uber, PayPal, Bolt, Amazon, and myriad other
online businesses, Yandex was the dominant tech company in Russia,
employing thousands of engineers, programmers, and designers across its
company, whose U.S.-traded shares were held by major U.S. mutual funds
and investment companies, had been under pressure since at least 2019,
when it was forced to give state bank Sberbank a veto over major
management decisions. The voting power was later transferred to a
But it was the Russian invasion of Ukraine, now in its 10th month, and
the Kremlin's censorship of news and debate about the war-- and the
rampant problems that Russians forces have faced on the battlefield --
that forced the final, sweeping decision.
Shortly after the February 24 invasion, the Kremlin pushed through
legislation that criminalized "discrediting the armed forces of the
Russian Federation" -- a catch-all measure that has allowed the
authorities to go after Russians who protest the war, question its
motivations, or even criticize the civilian or military leadership.
Russian media are barred from calling the conflict a "war," instead
using the phrase "special military operation."
Parliament has since tightened those restrictions further.
Yandex's search engine, and its main news page, Yandex News, were the
dominant portals used by Russians to search for news, including about
the war. But the company began tweaking its algorithms to direct
searches toward state-run media around the time of the invasion.
On March 7, two board members quit in protest. A week later, the deputy
executive director resigned, after he was hit with European Union
sanctions. Volozh resigned in June after he was hit with EU sanctions.
In August, the company announced the sale of Yandex News and another
entertainment portal called Yandex Zen to VK, Russia's dominant
social-media company, whose control was sold to a Putin ally in late