Russia's Yandex 2004 US GAAP Net Profit $7 Million Vs $3 Million '03

MOSCOW -(Dow Jones)- Yandex, Russia's largest internet search engine company, said Thursday its net profit more than doubled in 2004 on the back of strong growth in Internet advertising.

Yandex said 2004 net profit rose to $7 million from $3 million in2003 according to U.S. Generally Accepted Accounting Principles. Revenue rose to $17 million, tripling on the year.

Yandex Chief Executive Arkady Volozh said Internet advertisingin Russia rose by 90% to $40 million in 2004. Of that, revenues from banners rose 55% to $25 million and paid search advertising rose 200% to $15 million.

"We are basing the success of our business model on the paid search advertising sector, catering to small- and medium-sized businesses, in Russia's regions as well as in Moscow and St. Petersburg," Volozh said at a press conference.

Volozh said he believes Yandex's well-defined niche helps it compete with Russian and foreign companies.

However, he said the company understands that the Russian market is getting big enough to become interesting to the likes of Google Inc. (GOOG), Yahoo! Inc. (YHOO) and Microsoft Corp. (MSFT).

Volozh said Yandex would consider raising capital via an initial public offering to become more competitive if those players enter the Russian market in a big way.

Yandex' main shareholder is Runet Holdings with 33%, management owns 10% and the rest belongs to private equity funds.

Company Web site: http://www.yandex.ru