November 21, 2005The Moscow Times
Unlike other high-profile Internet gurus, Arkady Volozh, co-founder of Russia's largest Internet portal, Yandex, does not sport a ponytail and appears at public functions in a suit and tie.
Like the best of executives at Western technology start-ups, he has a quick mind and is first to crack wry jokes when least expected -- but his appearance betrays a subtle difference.
Volozh, 41, who looks somewhat like a researcher at the Academy of Sciences, took an unusual path to his sought-after spot on the information superhighway.
While the future kings of the United States' Internet boom made late-night runs to Chuck's Donuts in Redwood City, California, or programmed the night away at Stanford University's Sweet Hall computing center, Volozh worked on establishing one of the first perestroika-era cooperatives. Called Magistr, this venture exported pumpkin seeds from Russia's south and imported personal computers from Austria.
The cooperative came about after a government decree made entrepreneurial ventures legal in the Soviet Union in 1988. "Our district's [Communist] Party office said, 'We are now creating cooperatives,'" Volozh reminisced. "Our institute's head called my department's chief and said, 'We'll be now establishing a cooperative.'"
At the time, he was working at the Pipeline Construction Research and Development Institute's computing center, which was tasked with many of the institute's most innovative projects.
"I still don't understand how [this cooperative] really functioned," quipped Volozh, who was required to work at the pipeline research organization for at least three years after graduating from Moscow-based Gubkin State University of Oil and Gas in 1986.
Ironically, Volozh originally wanted to study geology at Moscow State University, or MGU. A twist of fate, however, prevented Yandex's future co-founder from becoming a geologist like his father and brought him to Gubkin's applied mathematics faculty, which eventually led him to cash in on Russia's first love affair with computers.
In 1981, it was difficult for minorities and applicants from outside Moscow to get into the capital's top schools. Despite graduating with top marks from Kazakhstan's physics and math school in Alma-Ata, now called Almaty, Volozh was not admitted to MGU. Neither was his classmate Ilya Segalovich.
A decade later, Segalovich would come up with the name for Yandex and become its chief technology officer. At the beginning of the 1990s, however, most Russians had never heard of the Internet and owning a personal computer was a true luxury. "A personal computer was like a personal car," Volozh recalled.
He left Magistr in 1989 with two PCs, selling them for $3,600 to purchase a two-room apartment near Kievskaya metro station. Still, he was not real estate market bound because working on new technology was Volozh's next goal.
Together with Arkady Borkovsky, now with Yahoo! in California, Volozh established Arkadia. This company, which Segalovich joined in 1990, developed search technology that could find information in Russian, despite the numerous forms a Russian word can take depending on its case, gender and tense.
Arkadia was Yandex's predecessor. However, the intricacies of the English language led Volozh to dabble in another big-name computer business: CompTek, now a multimillion-dollar networking and telecommunications equipment distributor.
To help Volozh improve his English, a friend introduced him to Robert Stubblebine, then a 24-year-old from Boston studying Russian in Moscow. When Stubblebine brought a computer magazine to a lesson, Volozh asked: "You are also interested in computers?"
It turned out that Stubblebine had signed some deals to bring PCs to Russia. "He was actually a humanities person and very strong in sales," Volozh said. Stubblebine registered the CompTek name, which formally became a U.S.-Russian joint venture in the 1990s. After some orders were closed, Volozh said he began writing technical specifications for CompTek. In 1993, Volozh became CompTek's CEO. Eventually, the Arkadia web technology project became part of CompTek.
"In 1997, we launched Yandex.ru, where we indexed the entire Russian Internet. It took all of 4 gigabytes," he said. Originally, the Yandex team wanted to sell search technology to portals. "It turned out there were no [interested] portals, so we decided to make a portal ourselves," Volozh said.
It was about the same time, Volozh said, that he realized people take Internet brands very personally, since every time changes to the portal were made, the company would receive e-mails asking, "Why did you change our Yandex?"
Investors, unaware of the ensuing Internet bubble burst, were also catching on. Volozh left CompTek to concentrate on Yandex, which had become a separate business. With over $5 million in capital from the Ru-Net Holdings investment company, Volozh said Yandex employees created e-mail, shopping and other new web services.
"We used to create services as we wanted to use them. ... Now, we think of services that our children and parents would use," said the father of three.
With Internet portals now mass products, Yandex has grown from 12 programmers to a staff of 300. Unshaven programmers in bulky sweaters walk in and out of the company's kitchen, where the windows face the Academy of Sciences' computing center -- where Volozh saw his first PC in 1984.
"That is where Tetris [computer game] was made," Volozh said, pointing to one of the windows across the street. Yandex, however, is soon to leave this lucky spot because its two-story office is no longer large enough for the business.
The number of Russian Internet users has grown more than threefold since 2000 to reach over 20 million people, according to the Public Opinion Foundation.
At least one place in the country, however, remains Internet free.
"I don't have Internet at my dacha," said Volozh, who made a deal with his family not to work on the weekends. "We ski, play board games at the dacha."
