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Comment by mariojv | Hacker News Reader

Slightly off topic, but I was shocked at how small Yandex's revenues are, given that they're basically a Google and an Uber for a major region. USD 4.94 billion in 2021. That's a large company, but for a major tech company, I thought they'd be at least 10x bigger than that. ServiceNow earns more: https://companiesmarketcap.com/servicenow/revenue/

Are my expectations of earnings for large global tech companies unrealistic, is this a currency valuation issue, or something else? This was very surprising to me.

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I think it's mostly because Russia's gdp is only 1.48t usd according to google.

Most of that is natural resources sounds like they have a pretty small consumer economy for a country that huge.

Google says google's annual rev is 256.7b while US gdp is 20.94t.

So is this math correct? Yandex rev as % of gdp 5bb/1.48tt = .337%, google rev as % of gdp 256bb/20.94tt = .855%

I might have guessed even less given how much more tech companies make even between a US consumer and even somewhere like Europe. Fb is $48/15 in one quarter, I couldn't find one quickly for google

https://s21.q4cdn.com/399680738/files/doc_financials/2021/FB...

GDP alone means little to nothing, should be actually compared to the purchase parity power.

In that regards Russia is not that bad: https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(PP...

But of course this affect the way you see at numbers on an absolute value

Interesting I didn't know that term. That would definitely take more into account the size of their consumer market instead of Russia's being mostly state or oligarch owned extraction businesses.

But I think on the other hand also still shows the relative value?

Like say for example - numbers not real. If the purchasing power needed to buy one shirt in RU is $10, and $30 in US, than the max amount of ad profit would be in line with those profit margins.

So FB can charge more for a buy my shirt ad in the US, because the ad buyer can spend more in real $ terms

Yes I mean overall, probably when you look at margins and % you should see same outcome from a company in the same industry

But depends, if you use goods and services from foreign countries that affect also that aspect.

This is how is calculated btw:

https://www.worldbank.org/en/programs/icp/brief/methodology-...

> In that regards Russia is not that bad

Was not that bad.

Is still the case actually, if they only consume non-imported goods they won't see the difference that much.

They have been outside of the global economy for decades during the cold war, they definitely know how to decouple. The problem is that this world is different than the previous one

Thing is that PPP is only for basic stuff (food, energy), and not tech stuff. A phone in Russia is not cheaper, and in fact all the imported goods are not cheaper.

Depends what phone. if you're importing it yes, is not cheaper. If is a local brand most likely yes.

Also what you say is not even true

> Elementary PPP calculation The PPP estimation process begins with the participating economies collecting prices for items chosen from a common list of precisely defined items. These common lists include both regional items, priced in a specific region, as well as global items, priced in all ICP regions. These two sets of prices cover the whole range of final goods and services included in GDP: household consumption expenditures, government consumption expenditures, and gross capital formation expenditures.

https://www.worldbank.org/en/programs/icp/brief/methodology-...

Of course it contains global stuff but the weight of these are rather small in the basket of goods. First will come, basic necessities, housing, health, etc.

I am speculating, but I'd expect that Google's reach outside of USA is much larger than the Yandex's reach outside of Russia. In 2021 Alphabet had 46% of revenue originated from USA. If applied withing the country borders this brings the Google's GDP percentage number down to 0.393%. I am not sure what percentage is for Yandex in Russia but it doesn't look like Yandex is used outside of Russia much.

Texas has a larger GDP than Russia.

Imagine if you were the search engine for Texas. It’d be a nice business, but not massive.

I'm curious, what kind of features would "search for Texas" have to have to make 90% people switch from Google?

Better language support if Texas had its own language.

Note that people in Russia didn't switch from Google to Yandex: people in Russia switched from Yandex (and Rambler) to Google once Google has developed capabilities to search in Russian. Russian is flective language, so it's not trivial.

Yandex predates Google.

So the question is not really making 90% of people switch from Google but making 90% of people stay on Yandex. Inertia is a pretty big stumbling block.

There is also potential for local differentiation to be much stronger. Naver in South Korea manages to achieve this.

Yandex also paid to browser and smartphone vendors to be installed as a default search engine.

Promote very very local news, venues, events ?

Take the rural / urban répartition of texas into account, rather than California's one ?

To put it bluntly, be ostensibly "more red" than google (even though you would end up giving most of the same result, because the state is way more purple than expected) ?

Major American tech companies are prevalent across much of the developed world. Yandex is used only in Russia which has a much lower population and individual purchasing power.

Isn't Yandex only limited in Russia mostly? Economically they aren't big. Weibo, a Twitter like platform that serves a billion Chinese only earn 3B USD I believe.

Unlike China, Russia isn’t a closed market. For now.

Google search has about 2/3rds of what yandex has in Russia:

https://www.statista.com/statistics/1094920/leading-search-e...

> Google search has about 2/3rds of what yandex has in Russia:

They'll most probably block it, too, I'll give it a day or two. It also depends how the negotiations with the Ukrainian side go over the weekend.

Russia is a sheep in wolf's clothing. They play a great PR game that makes them look like a superpower playing with the big boys, but their GDP isn't that big.

Maybe it’s the USD conversion that seems to be skew it outward.All their ledgers/operations/everything would be in Russia local currency.

anywhere outside US, CA , aus and western europe, advertising costs are 10 times less or even much much lower. it s a very uneven distribution

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