Google doubled Yandex in terms of revenue growth rate in Russia

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In 2017, the Russian “daughter” of Google showed a record growth in revenue for five years. Analysts connect the indicators with the growth of the online advertising market and the number of Android-devices users

Office of Google (Photo: Anna Sergeeva for RBC)

The revenue of Google, the Russian subsidiary of the Internet-holding company Google, increased in 2017 to a record 51% in the last five years and amounted to 45.2 billion rubles, according to SPARK. Net profit for the past year increased by 87% and amounted to 5.8 billion rubles. The profit from sales has almost doubled – to 6.99 billion rubles.

The press service of LLC “Google” did not comment on the financial results.

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Technologies and Media

Analyst “Discovery Broker” Timur Nigmatullin believes that the company’s revenue growth may be associated with the growth of the market for contextual and media Internet advertising. According to him, in 2017 the advertising market began to come out of the crisis, which affected the company, which receives 95% of its revenue from it. The expert agrees and senior analyst for telecommunications and media Raiffeisenbank Sergei Libin, noting that over the past year the market for online advertising has grown.

According to the Association of Communication Agencies of Russia, following the results of 2017, domestic advertisers spent 417 billion rubles to promote goods and services, which is 14% more than in 2016. According to the dynamics of income, like all previous years, the Internet was leading with a growth of budgets by 22% (TV growth is more modest – 13%). The expected growth in total advertising costs in Russia in 2018 will be 12.4%, and the market will reach a volume of 461.7 billion rubles., Follows from the forecast of the network agency Zenith (part of the French holding Publicis). In 2017, advertising revenue of Google’s main competitor in Russia – “Yandex” – increased by 20%, to 87.4 billion rubles.

The total revenue of the Russian Internet company, according to SPARK, increased by approximately 20% compared to 2016 – to 86 billion rubles. (against 71.7 billion rubles in 2016).

According to international reporting standards, Yandex showed an increase of 24%, to 94.1 billion rubles.

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“Another factor could be the growth of Google’s search share in Russia, in particular, due to the growth of mobile Internet traffic,” believes Libin. According to the LiveInternet counter, in January 2017, Google’s search share was 38.6%, and 12 months later, in December – 43%.

Libin suggests that revenue growth could be affected by the growth in revenues from the application store as the number of Android devices increased among Russian users. According to the report of the analytical company App Annie, in aggregate in the app stores (accounting for expenses in the App Store, Google Play and third-party Android stores without deduction of commissions), Russians spent $ 580 million for the past year. For comparison: in 2016 this figure was $ 420 million , in 2015 – $ 350 million (growth for three years – 65%). According to the Svyaznoy electronics store, in the nine months of 2017, the share of Android devices in the smartphone segment in Russia was 88%.

Article sourced from the this at RBC and machine translated for your convenience

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