Yandex Earnings

Yandex NV (NASDAQ:YNDX) announced its Q1 earnings today, indication revenues were up 51% to $200.3million along with a 53% increase in net income to $43 million.

Yandex is the leading search engine in Russia, however, its market share is beginning to concern investors. Last year the firm reported that it held 65% of the market share in Russia, while this year, it maintained only 59% of the total market, losing some ground to Google. However, the overall market in Russia is increasing, hence the growth in Yandex earnings The firm continues to expand into new segments as well as entirely new markets. This includes the powerful Rambler ad network as well as expansion into Turkey, where it launched a mapping application.

Market leader Google Inc (NASDAQ:GOOG), by comparison, had gross revenue increase only 24%, to $10.7 billion. However, their net income increased 61% to $2.9 billion in the first quarter. This shows that top line revenue growth can be greater when looking at emerging players in this space; however, this revenue comes with a cost, as expenses to acquire new visitors and enter new markets erode margins.

Baidu.com, Inc. (ADR) (NASDAQ:BIDU), China’s largest search firm currently holds three quarters of China’s search market. It had phenomenal numbers in the first quarter of 2012, with revenue coming at $4.3 billion, up 79% over the first quarter of last year. Earnings were also up 64% to $1.8 billion for the quarter. Baidu.com also has the highest net margins of the search firms, indicating a strong market position, but perhaps limited room for further improvement.
Microsoft Corporation (NASDAQ:MSFT), the owner of the Bing search solution, also had a relatively successful quarter in terms of sales, but experienced declining margins. Revenue increased 6% to $17.4 billion and earnings came in at $5.1 billion, which is actually down 2.4% from the prior year. It should be noted that this is actually Microsoft’s third quarter of 2012, as its yearend is June 30. It is also important to note that Microsoft is not directly comparable to the other search firms, as search and related advertising revenues are a relatively small portion of its total earnings.
Yahoo! Inc. (NASDAQ:YHOO) paints a different picture. Revenue for the firm grew only one half a percent to $1.2 billion in the first quarter of 2012, though net income did increase by 28% compared to the first quarter of 2011. We have been following that story closely as Dan Loeb’s Third Point, LLC has been waging a proxy war against management