Mail.ru Group

Mail.ru Group, ООО is a Russian internet company. It was started in 1998 as an e-mail service and went on to become a major corporate figure in the Russian-speaking segment of the Internet. As of 2013 according to comScore, websites owned by Mail.ru collectively had the largest audience in Russia and captured the most screen time.[4]

Mail.ru Group, OOO
Mail.ru headquarters in Moscow
Type of businessLimited liability company
Type of site
Web portal
Available inRussian
Traded asLSE: MAIL
Founded1998 (1998)
HeadquartersMoscow, Russia
Area servedWorldwide
Key peopleDmitry Grishin, Yuri Milner
IndustryInternet information providers
ProductsInternet services (electronic mail, search engine, website catalogue, file hosting service, instant messaging, blogging, information, answers service)
ServicesEmail & portal, Social networks, Instant messaging, Online games, Search & e-commerce
RevenueRUB 42.741 billion (2016)[1]
Operating incomeRUB 17.914 billion (2016)[1]
Net incomeRUB 11.616 billion (2016)[1]
Employees6 000 (2019)[2]
SubsidiariesVK
My.com
ICQ
OK.ru
URLmail.ru
AdvertisingYes
LaunchedOctober 15, 1998 (1998-10-15)[3]
Current statusActive

Mail.ru's sites reach approximately 86% of Russian Internet users on a monthly basis and the company is in the top 5 of largest Internet companies, based on the number of total pages viewed. Mail.ru controls and operates the 3 largest and most popular Russian social networking sites, VKontakte, Odnoklassniki, and Moi Mir, respectively.[5][6]

Mail.ru holds 100% of shares of Russia's most popular social network VKontakte[7] and minority stakes in Qiwi, formerly OE Investments (15.04%). It also operates two instant messaging networks (Mail.ru Agent and ICQ), an e-mail service and Internet portal Mail.ru, as well as a number of online games.

History

The business was originally owned by Port.ru, a company founded in 1998 by Eugene Goland, Michael Zaitsev and Alexey Krivenkov as spin-off from DataArt. It received an initial investment of US$1 million from the well-known investor (and fencing champion) James Melcher.

The Mail.ru business expanded rapidly to reach the No. 1 market position in Russia by 2000. Attempts to fund the company's expansion in 2000–2001 were thwarted by the collapse of the technology bubble and Mail.ru had to seek merger partners.

In 2001, Yuri Milner, at the time managing NetBridge (the owner of several internet brands), persuaded the entrepreneur Igor Linshits to back a merger of the Mail.ru business with NetBridge. Igor Linshits subsequently took an active role in the development of the Mail.ru business. In connection with the merger, Milner became Mail.ru CEO.

The company began to operate under its present name on 16 October 2001. Before that time its brand name was owned by Port.ru. It is headed by Dmitry Grishin.

In 2003 Milner resigned from Mail.ru and subsequently set up another internet venture, Digital Sky Technologies (DST).[8] In 2006 Igor Linshits sold his stake in Mail.ru to Tiger Fund and Milner's DST for more than $100 million. In September 2010, DST changed its name to Mail.ru Group.[9] Dmitry Grishin became one of the Mail.ru Group co-founders.[10]

In October 2010, Mail.ru Group announced plans for an IPO via the London stock-market listing of a subsidiary – also called Mail.ru – worth more than $5bn.[11] The IPO offered a stake of about 17% of the subsidiary. The subsidiary included about a quarter of the group's shareholding in Facebook, stakes in Russia's two biggest social networking sites and Mail.ru.[12] The company hired Goldman Sachs, JP Morgan, Morgan Stanley and VTB Capital to run the listing.[12][13] After the public offering, the global operations of Mail.ru Group continued as the privately-held company DST Global.[12][13] Major shareholders at the time included Alisher Usmanov, Tencent Holdings, Prosus and Naspers, and Tiger Management.[13]

In March 2012, Yuri Milner stepped down from the role of Chairman of Mail.ru and from the board of directors.[14] Dmitry Grishin was elected to the Board of Directors and appointed as Chairman of the Board while retaining his CEO position. There were no other changes to management or to the Board.[15]

In November 2012, it was reported that Mail.ru would discontinue using Google search services.[16] Full migration to the use of Mail.ru's own engine occurred in the summer of 2013.[17]

In late 2012, Mail.ru Group's plans for buying two-letter domain My.com became known. This was interpreted as an intention of dominating world markets and of the upcoming re-branding of services under this name.[18] At the end of 2012, Mail.ru Group bought the Ukrainian email service mail.ua and the registration of email addresses using this domain started on 23 April 2013.[19]

On 3 October 2016, Mail.ru announced that they had acquired 100% of the game developer Pixonic's shares.[20]

In January 2018, Mail.ru acquired ESForce, a holding company that owns a number of different esports businesses, including both Virtus.pro and SK Gaming, for US$150 million.[21]

In September 2018, Alibaba announced buying a 10% stake in Mail.ru, which would have a value of $484 million based on Mail.ru's market capitalization on 10 September 2018.[22][23]

In July 2019, Tencent-backed iDreamSky Technology Holdings and Mail.ru Group announced an alliance in the gaming sector in China and Europe.[24] In December 2019, Mail.ru Group formed a partnership with Sberbank to develop the food and transportation service O2O.[25]

In 2020, the state Russian Direct Investment Fund, China's Tencent, Naspers, and others bought $600 million of GDRs and bonds from Mail.ru. The funds were raised for the development of O2O and AliExpress Russia.[26]

Statistics
  • In 2005 there were more than 30 million users with 25 million emails a day.
  • By the end of 2006 it was announced that a strategic agreement with Yandex was achieved about the use of a Yandex search engine instead of Google. This has been reversed in January 2010.[27] This collaboration was dropped in November 2012,[16] with migration to its own engine, which ended in mid-2013.[17]
  • In January 2007 30% shares of Mail.ru were bought by South African company Naspers for $165 million,[28] and by 2019, the Naspers spin-off Prosus had 28% of Mail.ru.[29]

Services

Mail.ru Group offers a variety of online communication products and entertainment services for Russian speakers all over the world

  • Email & portal – email, main page, content projects
  • Social networks – VK, OK.ru, My World
  • Instant messaging – Agent, ICQ
  • Online Games – MMO games, Social games, Mobile games
  • Search & e-commerce – Search, Headhunter, Price comparison
  • My.com – integrated communication and entertainment platform.
  • Cloud – cloud storage similar to Dropbox, apps available for PC and smartphones[30]
  • DST Global – private equity and venture capital investments.[31]

Controversies

On 15 May 2017, Ukrainian President Petro Poroshenko signed a decree to impose a ban on Mail.ru and its widely used social networks including VKontakte and Odnoklassniki as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the War in Donbass.[32][33] The move was widely criticised as censorship, and Reporters Without Borders condemned the ban, calling it a "disproportionate measure that seriously undermines the Ukrainian people's right to information and freedom of expression."[34][35] Mail.ru itself estimated (in August 2017) that the ban had cost them around 1.5% of total revenues in 2017.[36]

On 5 November 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Russian state organizations with ties to Vladimir Putin pursued between 2009 and 2011 large investments in Facebook and Twitter via an intermediary—Russian-American billionaire and entrepreneur Yuri Milner, founder of Mail.ru and DST Global, who befriended Facebook founder Mark Zuckerberg[37] and was a business associate of Jared Kushner, President Donald Trump's son-in-law.[38]

A Kremlin-owned firm, VTB Bank, put $191 million into DST Global, which used it to buy a large share of Twitter in 2011. A subsidiary of the Kremlin-controlled Gazprom funded an investment company that partnered with DST Global to buy shares in Facebook, reaping millions when the social media giant went public in 2012. Twitter similarly went public in 2013. The US government sanctioned VTB in 2014 because of the Russian military intervention in Crimea, but DST Global had sold its stake in Twitter by then. Four days after the Facebook IPO, a DST Global subsidiary sold more than 27 million shares of Facebook for roughly $1 billion.[39]

References
  1. "Mail.ru Group Financial Statements 2016" (PDF). Mail.ru. Retrieved 26 August 2017.
  3. "Mail.Ru празднует 10-летие" (in Russian). Archived from the original on 22 October 2008.
  4. comScore. Which Sites Capture The Most Screen Time in Russia?
  5. comScore. Russians Spend over 6 hours a Month on Odnoklassniki
  6. Mail.ru Takes Over ‘Russia’s Facebook’ Vkontake In $1.47B Deal
  7. "Russia's Mail.Ru buys remaining stake in VKontakte for $1.5 bln". Reuters. Retrieved 27 November 2014.
  8. Digital Sky Technologies ("DST") Changes Name to Mail.ru Group Archived 20 October 2010 at the Wayback Machine
  9. Weaver, Courtney (26 October 2010). "Testing Russian charm in the City". Financial Times. Retrieved 21 December 2011.
  10. "Mail.ru group corporate governance". mail.ru group. 18 March 2012. Archived from the original on 28 March 2012. Retrieved 18 March 2012.
  11. Weaver, Courtney (8 October 2010). "Investors offered a slice of Facebook". Financial Times. Retrieved 21 December 2011.
  12. "Facebook, Groupon And Zynga Investor Mail.ru (aka, DST) Shoots For $5.7B Valuation In IPO". TechCrunch. Retrieved 29 January 2021.
  13. Mauldin, William (5 November 2010). "Mail.ru Eyes $5.7 Billion IPO Valuation". Wall Street Journal. ISSN 0099-9660. Retrieved 29 January 2021.
  14. "Yuri Milner Is Freed From Mail.ru Board To Take Care of Business". TechCrunch. 14 March 2012. Retrieved 18 March 2012.
  15. "Mail.ru group limited: Appointment of new Chairman". mail.ru group. 14 March 2012. Archived from the original on 16 March 2012. Retrieved 18 March 2012.
  16. Mail.Ru откажется от поисковых услуг Google // Vesti.ru (in Russian)
  17. Jennifer Slegg: Russia's Mail.Ru Drops Google Search, Launches Own Search Engine // searchenginewatch.com, 3 July 2013
  18. Mail.ru пойдет за рубеж с новым именем // dp.ru, 30 October 2012 (in Russian)
  19. "Mail.Ru открыла регистрацию почтовых адресов в домене @mail.ua – AIN.UA" (in Russian). Archived from the original on 27 April 2013. Retrieved 2 May 2013.
  20. "Acquisition of mobile games developer Pixonic". corp.mail.ru. Retrieved 21 July 2020.
  21. Ring, Oliver (22 January 2018). "ESForce acquired by Mail.Ru for $150 million". Esports Insider. Retrieved 5 January 2021.
  22. "Terms of Service Violation". Bloomberg L.P. Retrieved 12 September 2018.
  23. Kurmanaev, Anatoly; Woo, Stu (11 September 2018). "Alibaba Teams Up With Russian Tech Giant". The Wall Street Journal. ISSN 0099-9660. Retrieved 12 September 2018.
  24. Tsydenova, Pei Li, Nadezhda (31 July 2019). "Tencent-backed China firm, Russia's Mail.ru to tie up for gaming growth: sources". Reuters. Retrieved 29 January 2021.
  25. "Mail.ru Group and Sberbank complete O2O JV deal – Company Announcement - FT.com". markets.ft.com. Retrieved 29 January 2021.
  26. News, East-West Digital (6 October 2020). "Naspers, Tencent and RDIF buy Mail.Ru's GDRs and bonds". Retrieved 29 January 2021.
  27. "Confirmed: Google To Power Search, Ads On Mail.ru Starting January 2010". TechCrunch. 15 December 2009. Retrieved 21 December 2011.
  28. "African Naspers buys 30% stake in one of Russia's biggest internet portals". C-News. 24 January 2007. Archived from the original on 26 December 2007. Retrieved 5 June 2007.
  29. https://www.calvert.com/includes/loadDocument.php?embed&fn=23915.pdf&dt=fundPDFs
  30. cloud.mail.ru
  31. "Company Overview of DST Global". Bloomberg L.P.
  32. Poroshenko, Petro (15 May 2017). УКАЗ ПРЕЗИДЕНТА УКРАЇНИ №133/2017: Про рішення Ради національної безпеки і оборони України від 28 квітня 2017 року "Про застосування персональних спеціальних економічних та інших обмежувальних заходів (санкцій)" [DECREE OF THE PRESIDENT OF UKRAINE №133 / 2017: On the decision of the National Security and Defense Council of Ukraine dated 28 April 2017 "On the application of personal special economic and other restrictive measures (sanctions)"] (in Ukrainian). President of Ukraine. Retrieved 13 March 2018.
  33. Додаток 2 до рішення Ради національної безпеки і оборони України від "28" квітня 2017 року "Про застосування персональних спеціальних економічних та інших обмежувальних заходів (санкцій)" ЮРИДИЧНІ ОСОБИ, до яких застосовуються обмежувальні заходи (санкції) [Annex 2 to the Decision of the National Security and Defense Council of Ukraine dated 28 April 2017 "On the Application of Personal special economic and other restrictive measures (sanctions) "Legal Entities under Restrictive Measures (Sanctions)"] (PDF) (in Ukrainian). President of Ukraine. 28 April 2017. p. 185-6 (#422 mail.ru Group), 186-7 (#423 ТОВ "Вконтакте" (VKontakte)), 187-8 (#424 ТОВ "В Контакті" (In Kontakte)) & 189 (#425 mail.ru Ukraine). This is a prohibition of Internet Service Providers (ISP) to provide access to the internet service "Mail.ru" (www.mail.ru) and social-oriented resources "Vkontakte" (www.vk.com) and "Odnoklassniki" (www. ok). Retrieved 13 March 2018.
  34. https://rsf.org/en/news/rsf-urges-ukraine-scrap-ban-russian-social-media-sites%7C%5B%5D RSF | 23 May 2017
  35. Ukraine's Poroshenko to block Russian social networks, BBC News (16 May 2017)
  36. Russia's Mail.ru raises sales forecasts, shrugs off Ukraine ban – media, Ukrainian Independent Information Agency (12 August 2017)
  37. "Kremlin-owned Firms Linked to Major Investments in Twitter and Facebook". International Consortium of Investigative Journalists – ICIJ. 5 November 2017.
  38. Swaine, Jon; Harding, Luke (5 November 2017). "Russia funded Facebook and Twitter investments through Kushner associate". The Guardian. Retrieved 5 November 2017.
  39. Spencer Woodman (5 November 2017). "Kremlin-Owned Firms Linked To Major Investments in Twitter And Facebook: The Russian government quietly held a financial interest in U.S. social media". ICIJ. Retrieved 6 November 2017.
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