In late April, President Vladimir Putin said the government is considering what types of companies should be recognized as mass media outlets, which require a license in Russia. Putin said Russia should protect its information in a market dominated by US technology, suggesting he may try to gain more control of Russia’s online industry as his push into neighboring Ukraine has fuelled the worst standoff with the west since the Cold War.
In the middle of May, a deputy of the Liberal Democratic Party, Andrei Lugovoi, asked Prosecutor General Yury Chaika to check whether Yandex complied with the mass media law, because it should be considered a mass media outlet.
Yandex spokesman Vladimir Isaev said that the company is ready to invite lawmakers and explain how Yandex.News works.
“Yandex.News does not have its editorial staff and moderators; the service does not create its own material; it does not have an editorial policy and its own point of view. All pieces of news are supplied by our partners. Yandex.News publishes only original headlines, while stories themselves remain on Web sites of our partners.”
But analysts warned that the government will most likely opt for treating the news aggregator as mass media.
“The decision is supposed to purge Yandex’ news flow by making it contain only politically correct and ‘needed’ materials,” Alpari senior analyst Anna Bodrova told Russian Connection.
“There is also another point of view: the news flow volume may not shrink, because the principles of indexation will remain the same, and the list of the Web sites, supplying news, will not decrease but continue expanding. Mass media have to enter a new level of work by offering clients a full package of verified and trustworthy information.”
Yandex.News’ audience in Russia grew from 21.430 million visitors in January 2014 to 24.801 million visitors in March 2014.
Vladimir Rojankovski, director of the analytical department at Nord Capital, said he strongly believes that Yandex is just an aggregator of existing information and has nothing to do with periodical publications. “According to law, mass media is a result of intellectual activities, having a form of periodic distribution of information,” he said.
If the government makes Yandex.News a mass media outlet, Yandex will have to be more cautious in picking news and angles of its coverage, Promsvyaz’ Krapivko said. The fact that the government is seeking to tighten the screws in many industries, including mass media, is well known to foreign investors, he said.
Yandex has already voiced its position: the company will fully comply with the law. Still, there are doubts regarding Google: the company has officially taken a pause for comment, but I think that the decision will be the same. Possibly, aggregators will have to review and toughen mechanisms of selecting news and information Anna Bodrova Alpari senior analyst Putin also expressed concern about Yandex’s corporate structure and said it could have been incepted in 1997 with the Western influence.
Yandex, wholly owned by Amsterdam-registered Yandex N.V., is one of the largest Internet companies in Europe, running Russia’s most popular eponymous Internet search engine and its most visited Web site.
Putin’s comments sent Yandex, with a capitalization of US $10 billion, sharply down.
The possible status of Yandex.News as mass media is unlikely to hurt Yandex’ value and market capitalization, but the company will be “more diligent and careful in picking up materials for publication,” Promsvyaz’ Krapivko said.Analysts did not rule out that the government may take the same approach to other Internet search engines, integrating news, like US giant Google.
“Yandex has already voiced its position: the company will fully comply with the law. Still, there are doubts regarding Google: the company has officially taken a pause for comment, but I think that the decision will be the same. Possibly, aggregators will have to review and toughen mechanisms of selecting news and information,” Alpari’s Bodrova said.
Putin may bring some clarity to the issue on Tuesday, when he meets with the participants of the domestic Internet market at an Internet-entrepreneurship forum, which will be attended by Yandex’ General Director and co-founder Arkady Volozh.