Reuters: Global Markets: Yandex shares drop as costs of keeping top spot rise

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Yandex shares drop as costs of keeping top spot rise Feb 19th 2013, 15:49 Tweet Share this Email Print Related News Thomson Reuters revenue, margin outlook disappoint Wed, Feb 13 2013 Higher advertising spending buoys Omnicom profit Tue, Feb 12 2013 As ads dip, Times Co increases revenue on subscribers Thu, Feb 7 2013 Google's fourth-quarter results shine after ad rate decline slows Tue, Jan 22 2013 Analysis & Opinion Clearing a way to Russian bonds The unsexiest media company alive: Time Warner Related Topics Hot Stocks » Asian Markets » The company logo is seen on the headquarters building of Yandex company, in Moscow June 14, 2012. Credit: Reuters/Maxim Shemetov MOSCOW | Tue Feb 19, 2013 10:49am EST MOSCOW (Reuters) - Russia's top internet search engine Yandex (YNDX.O) gave revenue guidance for 2013 that analysts said showed slowing advertising growth, sending its shares down 9 percent at the New York open. Yandex, which leads the world's top search engine Google (GOOG.O) with a 60.5 percent share of the Russian market, said fourth-quarter earnings grew 27 percent, outstripped by a 40 percent rise in its marketing and product development costs as it tried to maintain dominance of its home market. "It is a really difficult thing to control as the market gets more mature and it is more difficult to raise prices on inventory while the company has to be competitive across all other technological areas," said Anastasia Obukhova, analyst at VTB. Yandex's fourth-quarter total cost of revenue rose 40 percent to 2.1 billion roubles, while total revenue rose 37 percent to 8.8 billion ($290.4 million). It said cost increases reflected investments in growth, including personnel. For 2013 it expects rouble-based revenue, excluding that from Yandex.Money, its joint venture with Sberbank (SBER.MM), to rise by 28-32 percent. In 2012, revenue rose 44 percent to 28.8 billion roubles. "Yandex's guidance suggests to us that internet advertising market growth is slowing fairly sharply, although it is possible that the company has opted to guide relatively cautiously at this stage in the year," wrote Renaissance Capital analyst David Ferguson, who said the revenue forecast was below consensus. Ferguson noted speculation that the company was set to return cash to shareholders. "With this not happening, we see scope for disappointment here too," he said. (Reporting by Megan Davies; additional reporting by Anastasia Teterevleva; Editing by Louise Heavens) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints Comments (0) This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

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