Yandex on Tuesday presented their new service, Yandex.Navigator, which is available on iOS and Android OS.

The competing Google Navigation application is only supported by Android OS.

“We launch features once we feel they are ready for users,” Google Russia spokeswoman Alla Zabrovskaya said when asked about Google Navigation on iOS.

The new Yandex application will make 500 Russian and Ukrainian city maps available; 274 of them are proprietary maps made by Yandex. The new application uses the Yandex.Karty, or Yandex.Maps, services, and current road conditions are taken from the Yandex.Probki or Yandex.Trafficjams service.

“We have 3 million users and 3 billion messages from them every month. Our information updates every two minutes,” head of the Yandex mobile department Tigran Khudaverdyan said Tuesday.

The same is true of Google Navigation — the system combines multiple sources of data to update traffic conditions every few minutes.

Yandex.Navigator and Yandex.Karty are separate services. Many car owners previously used Yandex.Karty as a car navigator.

“In the future we plan to make them [Yandex.Karty and Yandex.Navigator] one service,” Khudaverdyan said, but “we do not want to make a big, clumsy monster. We want to keep our application simple,” he added.

The new Yandex service features a vocal guide that can be set as male or female. It offers two routes for the user to choose from. It shows maps in ordinary and 3-D graphics as well as in day and night modes. It will also show nearby restaurants, shops, filling stations and other services.

“We have more than 2.5 million organizations in our database. And, of course, companies can be highlighted on our maps for a charge,” Khudaverdyan said.

The new application from Yandex is available for free. It is intended for use only by car owners. Yandex.Navigator cannot map out walking or bicycle routes. It cannot be used without Internet access as information on it is updated continually.

In the future, Yandex will make it possible to just download maps and only then update information, Khudaverdyan said.

The Google application can be used not only by car owners, but also by users of public transportation and walkers in its beta version. It works without a web connection.

“Google Maps Navigation downloads map data for your upcoming route, so navigation will often continue to work even during periods of lost connectivity. However, rerouting and further searches will have to wait until you’re connected again,” Zabrovskaya said.

Google Navigation is available now in 100 Russian cities and 31 countries around the world. Yandex.Navigator shows only Russia and Ukraine.

“We have no plans now to made it available for countries abroad,” Yandex’s Khudaverdyan said.

And it works only in Russian.

“We will make a version in Ukrainian later,” Khudaverdyan said.

http://www.themoscowtimes.com/business/article/yandex-uses-its-own-services-for-new-app-wired/454642.html

The Moscow Times

 

Even though the Russian IT market is growing fast, having recovered completely from the 2008-2009 crisis, a number of issues have come to the forefront.

The Russian Minister of Communications Igor Shchegolev has reported that the country’s information technologies market saw a growth spurt of 14.6 percent in 2011, and the Ministry of Economic Development predicts that the market will grow by 15.8 percent in 2012, and by 18.1 percent in 2013, hitting no less than $32 billion.

In a recent analytical report entitled “Targeting the IT Market,” the stock analysis center Infin wrote that the market could very soon return to the growth rates witnessed before the crisis hit, as long as nominal GDP grows by 18.5 percent annually and the ruble continues to strengthen.

Currently, Russian IT companies control 1 percent of the global market for information technology product and services, worth roughly $16 to 20 billion. But behind these positive numbers are questions about the sector’s overall potential. In 2011, the World Economic Forum rated Russia 77th in the world for growth in the information and communications technologies sector and 3rd among resource-oriented countries. Today Russia exports at most $1.5 billion of IT services, and no more than 300,000 people work in the country’s IT industry.

The future is in the clouds

Hardware continues to dominate the Russian IT market, making up more than 50 percent of the sector. In contrast, hardware is only 30 percent of the European IT market. The rest of the segment there belongs to IT services (50 percent) and software (20 percent).

“This is the heritage of the past,” said Konstantin Chernyshov, a chief analyst at Uralsib financial corporation, discussing the situation in Russia. “Many Russian companies started making or assembling hardware, but this share is shrinking gradually as more and more companies are switching to making software and other high marginal segments.”

One place Russian companies hope to compete with international players is in cloud technology. Although this sector is fairly small at the moment, Chernyshov believes its growth rates will blow away similar figures across the entire IT services market in the period up to 2015.

The Russian government is a major promoter of cloud technology. One project in the works is a national cloud service for organizing inter-departmental computerized interaction. It will also provide state and municipal services to the public.

Market intelligence firm IDC predicts that the value of the cloud services market in Russia in 2015 will reach $1.2 billion. In 2010, the market was valued at just $35 million.

Cloud technology is one of 15 priority areas supported by Skolkovo, the government-sponsored tech hub rising outside of Moscow. Cloud technology is part of Skolkovo’s information technologies cluster along with multimedia search systems, video and audio processing and recognition, mobile applications, complex engineering solutions, green information technologies, wireless sensor networks and more.

A government led industry

The Skolkovo project is just one way the government has ramped up its support of the sector over the past two to three years. An increasing number of state agencies are now accessible online; various information projects have begun, and the state has stepped up its war against pirated property and commercial raids.

Moreover, the government has talked of developing online media and the commercial operation of fourth-generation networks. State-sponsored industrial parks are emerging, and the government has introduced special economic zones that have reduced taxation and other benefits.

But because the Russian government has suddenly become the biggest customer on the IT market, many companies are being created to serve governmental purposes, which has both positive and negative consequences. For one thing, it makes the sector much more sensitive to changes in the state budget. Growth in the IT sector lags three to four months behind that of other sectors, such as manufacturing, partially for this reason.

Additionally, the state does not have the best track record in developing IT projects. For example, the federal target program Electronic Russia (2002–2012), which was deemed a failure and was replaced by the state program Information Society (2011–2018).

Moreover, the state program for creating high-tech technology parks, which was supposed to use 10.3 billion rubles ($342 million) to create 10 development areas by 2010, was suspended mostly because of disappointing results. The program was later extended until 2014 and given an additional earmark of 13 billion rubles ($432 million).

“Officials just need a tick in the documents while business is focused on the profit,” said Ilya Rachenkov, an analyst with InvestCafe. But government support is needed to make any positive developments in the system and even skeptics admit that its influence is not all bad. Rachenkov confirms that he has heard good opinions on Skolkovo from businesses of all sizes. “For them it’s a place where they can come and get real investment without long bureaucratic procedures. Everybody is surprised because start-ups are traditionally supported by investment angels, not government.” Nevertheless, both Rachenkov and Chernyshov believe the private sector would do a better job in developing the IT industry than the government. Even here, however, there are barriers to entry.

Russia’s IT market is dominated by several big companies. The top 10 Russian IT firms accounted for 70 percent of all revenue earned by Russia’s top 30 IT companies. These top 10 control 54 percent of the Russian IT market – 5 percent more than in 2009.

Although Konstantin Chernyshov notes that none of the companies alone controls the lion’s share of the market and so there is still hope for IT start-ups, new companies struggle to receive funding. Additionally, they suffer from high taxes on labor, which come to roughly five to 10 percent of company expenses in non-commodities industries, cut into profits.

For companies willing to pay the labor costs, there are other problems. Foreign competitors such as Apple, HP, Foxconn and TrendMicro are entering the Russian IT market in droves, and this expansion will only increase after Russia joins the World Trade Organization. These companies have notable financial resources and leading technologies to attract Russia’s top IT specialists.

A lack of qualified human resources

“Many foreign software companies already have Russian specialists on staff,” said Rachenkov, and this is likely to increase as these companies establish themselves on Russian territory. And despite the country’s reputation as a source of top software designers and engineers, the reality is that the pool of actually qualified specialists is limited.

“Sometimes you have to wait for months to fill any given vacancy that requires knowledge that you would be hard-pressed to call specific,” said one company representative, who preferred to remain anonymous. Although Russoft saw a 17 percent gain in the export of software from Russia (up to 3.1 billion dollars) in 2010 over 2009, analysts believe imports will continue to form the majority of the Russian software market.

“Whether an IT start-up can become successful or not is a question of the right strategy and marketing,” said Konstantin Chernyshov. “It doesn’t mean that any start-up will grow into a giant company in Russia, because the market is saturated and divided. But now it’s a land of opportunities.”

Experts believe that the future of the IT market is in the Russian regions. The country’s IT sector is currently concentrated in Moscow and St. Petersburg, but more and more residents outside these major cities are coming online, and the number of Internet users in the regions is expected to explode in the next five to 10 years.

Other potential growth segments include search engines and navigation software, according to Ilya Rachenkov. This is due to opportunities and challenges that make the Russian market unique. The complexity of the Russian language has allowed local companies like Yandex to dominate the market for search. Google is a distant second in the Russian search market. The finally active Glonass – Russia’s answer to GPS – has stimulated development in navigation.

But overall growth in the IT sector, like in the rest of Russia’s economy, will depend on real economic growth, an increase in investment activity, stabilization of the country’s financial and political situation, an increase in personal incomes, a stable exchange rate, moderate inflation and benefits that can encourage new enterprises to form.

http://www.ewdn.com/2012/03/15/russian-it-market-faces-cloudy-future/

News from East-West digital News

Mail.ru announced on Monday that its webmail interface is now available in Ukrainian. This marks the first time that Mail.ru has offered its service in a language other than Russian. In addition, the site will be slightly redesigned to include some Ukrainian-style elements, Mail.ru announced.

However, the Russian webmail giant has failed so far to acquire the Mail.ua domain name, which belongs to Internet Invest Group, Ukraine’s largest web hosting service provider.

In January 2012, Mail.ru’s webmail served 4.8 milllion users from Ukraine, or 34.8% of the total number of Internet users in that country, according to Gemius. If taking into account the other services offered on the portal, Mail.ru attracted no less than 8.6 million users from Ukraine, corresponding to a 62% reach.

A former Soviet republic, Ukraine has a large Russian speaking population, but the national language is widely used in the Western areas of the country.

The LSE-listed Mail.ru Group has operated a representative office in Ukraine for more than three years. The office creates or adapts some of the portal’s services to the local market, manages partnerships with Ukrainian web players, and sells inventory to local advertisers.

Mail.ru announced recently that it has become the fourth largest webmail service in the world, far behind Hotmail, Yahoo and Gmail, but ahead of AOL, citing statistics from ComScore.

http://www.ewdn.com/2012/03/14/russian-webmail-service-mail-ru-now-available-in-ukrainian-language/

News from East-West digital News

 

Travelmenu.ru, a Russian online travel startup specializing in package tours, took advantage of the Russian winter holiday season to increase its brand awareness using a bold parody of President Medvedev’s New Year’s greetings.

Released on December 19, the humorous video features the Russian President’s traditional greetings to the nation, revealing a behind-the-scene sea, sex and sun environment instead of the Kremlin view from where Medvedev’s address was officially supposed to have been broadcast.

With 6 million Russian Internet users having viewed the video clip on Youtube in three months, Travelmenu.ru’s campaign could count among the most notable successes so far of viral marketing in Russia.

An established element of almost any marketing strategy in the West, viral marketing has been tried thus far by only few companies in Russia, mostly Western ones, with relatively small budgets.

But the approach in Russia and Western Europe is basically the same. “Viral marketing is made of innovation, of bold themes such as sex, alcohol, politics, or of all these together – in a suggestive way, of course,” Travelmenu.ru CEO Katrin Buckenmaier said to East-West Digital News.

One difference in Russia, however, could be the approach to politics and politicians. “Our clip featuring Medvedev on a beach with sexy girls corresponded to topics that people had in mind at this time of the year. Our agency managed not to cross the line of a political video. In Europe, it could perhaps have been designed with a freer approach. Marketers do not risk prosecution in Europe when joking about politicians,” Buckenmaier believes.

Travelmenu.ru claims that its Medevedev parody campaign led to increase the site’s traffic up to five-fold while sales increased up to 250% in the days following the release of the video.

• RUSSIAN E-COMMERCE REPORT 2012 – The total volume of Russian online retail reached 310 billion rubles, a little more than $10 billion, in 2011, up 25% from the previous year. EWDN’s research study of Russian e-commerce, which includes analysis and recommendations on marketing tools for online retailers, will be available in April 2012. To receive free insights or to order the full version, please contact us at editor@ewdn.com.

http://www.ewdn.com/2012/03/19/travelmenus-video-parody-of-medvedev-generated-6-million-views-in-3-months/

News from East-West digital News

The country’s burgeoning e-book market is seeing dramatic growth rates, with an ever-increasing number of titles available in electronic format and e-readers continuing to fall sharply in price.

And while fantasy, detective novels and other fictional works make up the traditional cohort of best-selling genres, they have occasionally been overtaken on the list of most-read e-books in recent months by business and political prose.

Last year’s sales were dominated by titles dedicated to Steve Jobs and Apple, according to LitRes, the market leader in Russian e-book sales, whereas Konstantin Voronkov’s “Alexei Navalny: the Threat of the Crooks and Thieves” topped the charts in the buildup to the March presidential election.

But despite Russians’ increasing affinity for reading on screens, market players caution that it will be a long time before e-books replace printed titles.

The size of the Russian e-book market is currently $2.2 million, with e-books accounting for less than 1 percent of total book sales, according to a December 2011 report by RBK Research, although these figures are expected to rise as the considerable growth potential of the domestic online retail industry is realized.

Prices for e-books on LitRes’ site range from 10 rubles (30 cents) for Lev Tolstoy’s novel “Childhood” to 250 rubles for the Russian translation of Walter Isaacson’s “Steve Jobs.”

In the market research company’s best-case scenario, e-books’ share of the Russian book market could hit 30 percent by 2015.

For comparison, e-books now account for approximately 8 percent of the U.S. book market and 2 percent of the British market, the report said.

RBK’s bold predictions are bolstered by Russia’s ever-increasing number of Internet users — in November last year the country became the No. 1 Internet market in Europe, with more than 50 million users.

And after the international financial crisis led to shrinking print runs — which dipped roughly 15 percent between 2008 and 2010, according to Federal Press and Mass Media Agency data — online companies selling electronic content have started to prosper.

One success story has been Ozon.ru, the online retailer dubbed Russia’s Amazon that now sells e-books alongside its range of printed books, films, music and domestic appliances.

The company has more than 5.6 million registered users and posted total first-half revenue of 2.4 billion rubles ($82 million) in 2011, a 36 percent increase over the same period last year, Ozon.ru said in a statement.

E-books and e-readers are seen as a key growth market for Ozon.ru, said Mikhail Osin, director of the retailer’s digital sales department, who anticipates steady growth in sales in the coming years.

“Sales of e-books are rising at a fast rate, and this trend will continue in the future,” he said.

The company saw a 40 percent increase in e-book sales over 2011, while e-reader purchases rose 250 percent over the same period.

Although e-books don’t present a real threat to printed book sales yet, “new technologies are occupying a segment of the market, which of course is a concern to publishers, making them adapt their business model and even switch to the production of electronic books,” Osin added.

Ozon.ru’s optimism is shared by dedicated e-book and e-reader sellers, including LitRes, which owns the rights to almost 70 percent of Russian electronic titles.

After three years of ”stormy” growth following its creation in 2007, the company sold about 750,000 e-books in 2011. Based on sales in January 2012, LitRes hopes e-book purchases from its website will top 1.2 million this year and believes that Russia’s e-book market will double in size in the next 12 months.

LitRes general director Sergei Anuryev sees price as a key factor for growing consumption.

“While the average price of paper titles has roughly doubled over the last three years, e-books on average cost a third of the price. At times, they are even five times cheaper,” he said.

Another factor is the long daily commute many Russians face to reach their workplaces, he said. His comments are borne out by any trip on the Moscow metro, where passengers of all ages can be seen clutching e-readers and flicking through electronic titles.

Russians’ love of reading and tumbling prices for e-readers, which have dropped about 30 percent a year over the last two years, provide a further impetus for growth, said Yevgeny Militsa, director of PocketBook Russia, an e-reader retailer that puts its market share in the country at 40 percent.

PocketBook sold roughly 400,000 devices in 2011 and, after almost doubling 2010 sales last year, estimates that the market will grow another 50 percent in 2012.

“Just one year ago, 80 percent of e-readers were sold on the Internet. It was a small market and a niche product,” but now e-readers are readily available in stores across the country and are within reach of most Russian consumers, Militsa said.

PocketBook’s cheapest reader costs about 3,400 rubles ($120), with its most expensive multimedia device priced at 15,000 rubles.

But despite some market players’ optimistic growth predictions, many also acknowledge that endemic piracy clouds accurate market forecasts and siphons off huge revenue.

“Right now, the availability of free content drives the market,” PocketBook’s Militsa said, adding that his company has rolled out software to block illegally downloaded e-books and protect intellectual property rights.

In addition, LitRes’ Anuryev said, the lack of a broad enough selection of books legally available for download forces readers to turn to pirate sites.

Since regulating piracy is nearly impossible — as the servers hosting illegal content are often spread over a diverse area, beyond the jurisdiction of the target country — LitRes has adopted an alternative approach to tackling the problem.

The company opens a dialogue with pirate sites in the hope of convincing them to place links on their web pages to LitRes content, Anuryev said.

In one successful case, LitRes developed an understanding with Epubbooks.ru, a pirate site claiming to host free e-books for ”familiarization purposes only.” Now, when a visitor to the Epubbooks site clicks on a title for which LitRes owns the rights, they are redirected to Litres.ru.

Such schemes are a testament to the lengths e-book sellers will go to promote their products, but pirated books still dwarf their licensed equivalents on the Russian Internet.

The pirate market is currently as much as five times the size of the legal market for e-books, according to some estimates.

And there is still a battle to be waged to convert those who prefer to read paper copies.

Alexander Bobrowski, LitRes’ business development director, said the company’s biggest challenge will be to persuade Russian consumers to make the switch to reading in an electronic format.

“For many Russians, the value of a book still lies in its tangibility. For this reason paper still prevails,” he said.
http://www.themoscowtimes.com/business/article/commuting-and-content-driving-e-book-growth/454440.html
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