JPMorgan: The Russian Internet Market's About To Explode, Time To Buy

ivan drago rocky russia boxer if he dies he dies

Photo: Screenshot

JP Morgan Cazeneuve has a note out today on the Russian internet and its two biggest companies, Yandex and Mail.ru Group. The rating is “overweight” on both.Yandex is the “Russian Google”, a search engine with two-thirds marketshare in Russia and strong marketshare in other former Soviet Union countries. Mail.ru is a very big portal. JPM thinks both are going to do very well, and Mail.ru is better because it’s less expensive

Here’s the interesting part, however: JPM thinks the online advertising market in Russia is going to grow a lot more than people think. Most people expect it to grow linearly, but that’s not what happened in other markets, JPM notes. What happens is that when online audience reaches a tipping point, advertising budgets switch en mass. Right now online advertising is only 11% of total advertising in Russia, which certainly leaves a lot of room for growth. 

jp morgan russian online advertising

Photo: JP Morgan

That, JPM says, is why it’s worth owning Russian internet equities. If the online ad market in Russia grows faster than most people expect, Yandex and Mail.ru will do very well indeed. Or, You Know, The Russian Government Could Just Steal Them →

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.