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Russian tech giant Yandex boosts revenues, widens search dominance

FILE PHOTO: The logo of Russian internet group Yandex is pictured at the company's headquarter in Moscow

MOSCOW (Reuters) -Russian internet giant Yandex on Thursday reported a 46% year-on-year increase in third quarter revenue to 133.2 billion roubles ($2.14 billion) and said it had expanded its dominant share of the domestic search market.

Yandex in August agreed to sell its news aggregator, content platform Zen and homepage yandex.ru to Russian state-controlled VK in a move that is expected to tighten the government's grip on the internet, but Yandex's stranglehold on online searches has grown, accounting for a little under half of its revenue.

Yandex has, like many Russian companies, endured a turbulent year. It plunged to a first-quarter loss and its shares tumbled to six-year lows before trading was suspended in late February, shortly after Moscow sent tens of thousands of troops into Ukraine. Revenue and profits have since recovered.

"Current geopolitical tensions and their impact on the Russian and global economy have created an exceptionally challenging environment for our business, team and shareholders," Yandex said in a statement.

Yandex said revenue growth was mainly driven by improvements in ad technologies and "changes in (the) competitive landscape, which led to an increase of our market share compared to last year."

Google stopped selling online advertising in Russia in early March.

Yandex said its search market share had averaged 62% in the quarter, up from 59.3% a year earlier.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) stood at 20 billion roubles for the quarter.

Yandex said the solid revenue growth and savings related to advertising and marketing had helped offset the moderate adverse effect from the divestment of News and Zen, which was only completed a few weeks before the end of the reporting period.

E-commerce gross merchandise volume (GMV) nearly doubled to 195.6 billion in January to September, Yandex said, though it trails far behind market leader Wildberries, which posted GMV of 1.1 trillion roubles in the same period.

Yandex invested $600 million in e-commerce initiatives last year and intends to invest more as it tries to win market share in the fast-growing sector while scaling back investments in other areas.

($1 = 62.1000 roubles)

(Reporting by Alexander Marrow and Gleb Stolyarov; editing by Kevin Liffey and Elaine Hardcastle)