Russia's Internet giant Yandex has completed the sale of its news aggregator and Yandex.ru homepage to Kremlin-friendly rival VK, the owner of the eponymous social network -- a move experts have said will deal a further blow to Russians' access to independent media.
Under the deal finalized on August 23, Yandex is effectively ceding control of the distribution of online content to VK, whose owner Sogaz, is controlled by a long-time friend of Russian President Vladimir Putin. In return, Yandex is acquiring 100 percent of the VK-owned food delivery service Delivery Club. The deal was first announced in April.
Russia has sharply stepped up its already harsh clampdown on independent media after Moscow invaded Ukraine in February, passing a law banning what it calls "false information" about its military and stifling many media outlets' ability to broadcast uncensored news.
"The board and management of Yandex have concluded that the interests of the company's stakeholders...are best served by pursuing the strategic exit from its media businesses and shifting to a focus on other technologies and services," Yandex said in a statement.
“Following the completion of the transaction, the current main page with News and Zen will be renamed dzen.ru and will be further developed and controlled by VK (including control over the look and feel, content, etc.)," the statement said.
Yury Kovalchuk, whom Putin has publicly called a personal friend, indirectly controls a 32 percent stake in Sogaz along with his wife, making the couple the insurer’s largest shareholder. Sogaz in December purchased a controlling stake in VK for an undisclosed sum.
Kovalchuk is believed by some Kremlin observers to be the most influential person within Putin's entourage. He was sanctioned by the United States in 2014.
Since Putin came to power at the end of 1999, Kovalchuk has scooped up large swaths of Russia’s media industry, including more than a dozen TV stations, which he has used to bolster support for his patron.
One of the nation's key media assets outside Kovalchuk's control has been Yandex, often called "Russia's Google." The Internet company's news aggregator has become a key source of information for many Russians as they transition away from TV news.
That, in part, has made Yandex a regular target of government pressure.
The company has complied in recent years with Moscow's demands and restricted access to sites that have been banned by communications regulator Roskomnadzor, drawing criticism over its role in spreading and amplifying state propaganda.
Earlier this summer, Yandex opted to erase national borders from its Maps app in a bid to circumvent political pressure over where the software was drawing frontiers in Ukraine.
Jailed Kremlin critic Aleksey Navalny earlier this year accused Yandex of “a solid shameless lie” in claiming to display news on its homepage, given how its news feed amplifies state propaganda.
A number of senior Yandex executives have also been sanctioned by the EU -- although the company itself has, so far, evaded formal sanctions.
A former head of Yandex News, Lev Gershenzon, on March 1 described Yandex as a key element in hiding information about the conflict in Ukraine. Yandex has denied being complicit in censorship.