Yandex, the largest Internet portal in Russia announced last week that it acquired Moikrug.ru (a Russian version of LinkedIn). By itself the move was not surprising, as Yandex, which offers every imaginable web service in Russia from search to free web-hosting, added a largely complimentary professional networking site to its group. The value of the transaction was estimated at about $1.5 million for about 100 thousand users. Given that Russia's Internet audience in 2006 is estimated at about 26 million users (more than Italy or France), the combined company still has huge potential for explosive growth.
While it's extremely difficult to value social networks, let alone compare valuations across different companies in different countries, if one looks at this transaction on a simple value per user basis in comparison with LinkedIn and Xing, the deal actually looks pretty reasonable.
Social networks are inherently local, so it's not a big surprise to see successful national or even regional social networks pop up in the global internet scene. It's a fact that a majority of the internet users are spending more time than ever within their social networks so we should expect more interesting consolidations or acquisitions of social networking sites around the world.
