Yandex, VK, Kaspersky: Russian Internet companies that ran afoul of Putin

When the Kremlin wanted to compete with the West economically and in the contest for skilled workers more than a decade ago, its well-educated officials helped nurture homegrown answers to Google, Facebook and tech-security companies such as Symantec.

The top Russian search engine, Yandex, sold shares on Nasdaq. The big social network VKontakte got a major investment from an oligarch’s company as that firm sold stock, and the antivirus maker Kaspersky Lab expanded rapidly in other countries to become one of the best-known Russian exports.

But the very success of those companies unnerved top bureaucrats, who worried that such thriving Internet businesses would allow a new generation of Russians to glean uncensored information from around the world and to organize political movements beyond the government’s control.

The resulting onslaught of laws, regulations and back-channel demands that the Kremlin imposed has reduced those once-promising tech giants to shadows of what they could have been — while wrecking what the companies’ founders had hoped would be hedges against government domination.

“This has been a total disaster for the Russian economy, and the tech industry was adding a lot of value,” said Esther Dyson, an American and early investor in Yandex who left the search engine’s board shortly after Russia invaded Ukraine. “Even before they started waging war on Ukraine, they were waging war on the truth.”

Russian-language Yandex, which draws 4 billion visits a month and remains the most visited website in Russia, is the clearest example of Russian tech’s downfall. The majority of its stock is held by Western or global institutions and its headquarters is in the Netherlands, but neither fact has been enough to keep it from having to bend to Kremlin demands that it block search results for opposition leader Alexei Navalny or censor news about the war in Ukraine.

Yandex’s slow collapse, detailed here for the first time, shows how even the most advanced companies couldn’t be safe with their core operations in Russia, underscoring why entrepreneurs and investors predict that it will be years, if not decades, before they’ll…

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