Sources inform ''Globes'' that Russian search engine Yandex NV (Nasdaq: YNDX) will hire dozens of employees in Israel for development activities. It is unclear whether they will work at a development center that the company will establish in Israel, or if they will work on projects on an outsourcing basis.
The sources added that Yandex representatives have met several Israeli companies to examine collaborations.
This is not the first time that Yandex has shown an interest in Israel. It invested in facial recognition software develop Face.com, which was acquired by Facebook Inc. (Nasdaq: FB). Relations between Yandex and Facebook apparently played a role in the acquisition.
Yandex business development managers are currently in Israel. If Yandex acquires an Israeli company, it will likely serve as a platform for a local development center.
Yandex is one of the world's largest search engines. Founded in 2000, it raised $1.3 billion in its IPO on Nasdaq in 2011. Its current market cap is $12.5 billion. Like Google Inc. (Nasdaq: GOOG), Yandex offers a range of search categories, including images, maps, and news.
Yandex's feelers in Israel are part of a new trend. Ernst & Young believes that Russian companies have invested $60 million in Israel in the past few years. As Russia's high-tech industry matures, Israeli and Russian investors began examining business opportunities in the others' country.
Total venture capital investment in Russian high tech now equals investment in Israel, about $1 billion a year, and it is growing steadily," says Ernst & Young Israel partner Noam Canetti at the "Globes"-Ernst & Young Journey 2013 conference earlier this month. "Although bureaucracy and the business environment continue to be a challenge, foreign venture capital funds have begun making direct investments in Russia, and Russian companies have gone public in the UK and the US."
Yandex is entering Israel as many multinationals are establishing development centers in the country. In mid-October, Facebook announced the acquisition of Onavo Ltd. for $150 million, and which will become Facebook's development center in Israel. Amazon.com Inc. (Nasdaq: AMZN) will also will open an office in Tel Aviv to support the growth of its cloud services for Israeli customers.
Yandex said in response that it does not comment on its activity in Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on October 28, 2013
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