Yandex, the search engine often called the Google of Russia, announced another acquisition today that will extend its business into another vertical: it’s buying Auto.ru, an online classifieds business for selling cars, for $175 million in cash.
This will add to Yandex’s existing efforts in the automotive sector, where it has a portal aggregating classified listings across a number of car classified ads sites. What this will give Yandex is a move further up the chain — the ability to collect revenues on the actual listings and display ads that run alongside them, as well as a body of car-related content that will attract enthusiasts and prospective buyers to visit regularly even when they’re not buying a car. A spokesperson for Yandex tells me that the portal will continue to operate.
Auto.ru has been around since 1996 and currently has some 400,000 unique listings for cars for sale.
“Auto.ru is the most popular automobile-related website in Russia and operates the largest and most detailed classifieds catalogue for new and used cars in Russia,” said Alexey Tretyakov, VP of Commerce at Yandex, in a statement. “Users come to Auto.ru to research what vehicles they should buy, read the latest auto news, search for tires and spare parts and buy and sell their vehicles. The acquisition of Auto.ru will enable Yandex to provide more comprehensive answers to users’ questions and expand our capabilities in auto classifieds.”
Yandex over the years has been slowly building up its business to extend it beyond its mainstay search portal and search advertising that runs within it. That includes buying Kinopiosk (known as the IMDB of Russia) last year to add film search and recommendations to its portal. It also has an extensive business in mapping, mail, mobile apps and more; and, in March 2014, KitLocate to add more location-based services to its own and others’ mobile apps. Auto.ru is Yandex’s ninth acquisition.
As with its US counterpart Google, the idea here is twofold: to continue to widen the pool of places where ads might run and build on economies of scale; and to continue to strengthen business within key verticals where Yandex can offer advertisers more targeted views of their ads.
Focusing on the automotive sector specifically is a clever move for Yandex: in cities like Moscow and even more so in less urban areas, Russia has seen a surge of interest among people using their own cars over public transport or taxis to get around — a by-product of a rapidly-growing middle class with more disposable income.
In my own experience, it’s been fascinating to see the transformation of car usage in Russia over the last couple of decades — from a place largely full of old Russian-produced (and a lot of clunky Soviet-era) models to a landscape full of the latest to come off the assembly lines from much further afield, and those with the money to spare quickly going over the top.
