Russian Search Engine Yandex Prepping $2 Billion IPO

Yandex, the largest search engine in Russia, is preparing to raise up to $2 billion in an IPO that will value the company at $5 billion, Reuters reports. The newswire says that Morgan Stanley, Deutsche Bank and Renaissance Capital are on board to do an offering on the Nasdaq.

We’ve placed Yandex at number six on our SA 25 list of the world’s most valuable companies; we pegged its value at $3 billion:

Yandex generated revenue of about $160 million in 2007, up 130% over 2006’s $72 million, with most of it coming from contextual advertising. We estimate a 2007 operating margin of 40%, producing operating income of approximately $65 million. The company generated net income of $29 million in 2006 and $13.6 million in 2005…

Given Yandex’s growth rate and dominant market share, we believe the company is worth at least 40X-45X trailing net income, or $3 billion.

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