Russia's Internet business becomes attractive

Updated August 4, 2008

Russia’s Internet business already reached a certain level and became attractive from the investment viewpoint. In particular, this proves investment policy of Alisher Usmanov, who demonstrates high activity towards net projects this summer.

Mr. Usmanov is holding talks with Yandex co-owner and founder Arkadiy Volozh about stake purchase in the company. About this told a source close to one of Usmanov partners. A source does not know, whether talks with other Yandex owners are held, but assures that Mr. Usmanov is interested in receiving controlling interest. A source close to Mr. Usmanov says that he is interested in purchasing 15-20% Yandex stocks and has already made a proper offer to stockholders. He expects to get the answer in August.

We will mark that in June, 2008 Mr. Usmanov has received the stake in Sup Fabrik that owns blogs service LiveJournal.com for the Internet newspaper Gazeta.ru. And in July Mr. Usmanov purchased minority stockholding in Digital Sky Technologies company (DST), the co-owner of odnoklassniki.ru, vkontakte.ru, Mail.ru and some other assets.

"Russian Internet business has already reached a certain level: Ru.net has already become investment attractive. The fact Usmanov is interested in this direction proves this point. Usmanov is the very risky man, and quite often, when he answers questions, why he has done one or another purchase, he says he has some instinct. It seems as this instinct tells Usmanov to invest into the net projects", assumes director of Otkritie Financial Corporation analytical department Khalil Shekhmametiev.

High investment activity of Alisher Usmanov related to projects in Ru.net is explained by business foremost, as considers Finam Investment company analyst Vladislaw Kochetkov. "When Usmanov invests into perspective Ru.net projects, he expects to receive some earnings foremost. As the market is characterized by stable and high growth rates, Usmanov interest can be easily explained".

According to analyst, all projects, where Mr. Usmanov interest is obvious, are perspective sources of revenue. In Mr. Kochetkov opinion, when it comes to choose objects for investments, Mr. Usmanov pursues the strategy of investing into the largest and well-known projects. "Sup Fabrik owns the Russian segment of the most popular blogs system - LiveJournal.com, and odnoklassniki.ru and vkontakte.ru are the largest Ru.net online communities, and Yandex is number one search engine in RU", as continued Mr. Kochetkov. "Usmanov acts as rich investor: he does not invest into start-ups, he can afford to make large investments in leading and popular projects that differ on higher participation price, but stable guarantees as well".

Yandex is the Russian search system in the net and Internet-portal. The company web site was launched on September, 23, 1997. The company reached financial viability in 2002. Yandex services are as follows: search in the Internet and web sites catalogue, news and pay system, maps and encyclopedias, e-mail and system of spam filtration, catalogue of product offerings, Internet community of professionals and free photo-hosting, etc.

Alisher Usmanov was born on September, 9, 1953 in the town of Chust, Uzbekistan.
In early 1980th he started business activity. He was vice-president of the Uzbek-Belgian Vita joint venture in Tashkent.
Since 2005 CJSC Metolloinvest co-owner. Since 2006 Kommersant publishing house owner. Since 2007 the London Arsenal FC co-owner.

He is GazpromInvest holding chief executive, the owner of MediaHolding company, the co-owner of Metalloinvest holding, the owner of Kommersant publishing house, and the co-owner of Muz-TV music channel (purchased 75% of stocks).