Bloomberg reported yesterday that, according to “people with knowledge of the talks,” Vkontakte is “in early discussions with investment banks about a potential initial public offering in New York as early as next year.”
Vkontakte.ru — ‘In contact’ in Russian — was designed as a Facebook clone when it was launched in 2006, but important differences now distinguish the two websites.
Vkontakte stands as Russia’s leading social network with a total of 35.2 million Russian users as of last month, according to ComScore, and a monthly reach of 23.5 million users between the ages of 12 and 54 last April, according to TNS.
Vkontakte’s main Russian competitors are MoiMir and Odnoklassniki, with 19.34 and 18.35 million users per month respectively. Facebook lags far behind with just 5 million active users in Russia.
The influence of Vkontakte, which offers versions in more than 60 languages, is not limited to Russia. The website has opened over 125 million accounts worldwide and claims to generate more than half of the Internet traffic in Russia and the other former Soviet republics of the CIS. ComScore counted 23 million users outside Russia, as cited by Bloomberg.
Vkontakte’s revenues reached $93.8 million in 2010 and currently amount to as much as $9 million monthly, of which 60% comes from targeted advertising, the company’s Vice-President Ilya Perekopsky told Forbes Russia last week. Vkontakte plans to increase its revenues this year by 70% to 100%, he added.
Ongoing question regarding piracy
The Office of the United States Trade Representative (USTR) recently accused Vkontakte of “permitting users to access allegedly infringing materials” contained in its huge user-generated base of music and video materials.
But the USTR report “doesn’t reflect things” done by the company to fight piracy, responded Andrei Melnik, a spokesman for Vkontakte.ru, in an exchange with The Moscow Times.
Mail.ru Group, a prominent Russian Internet group that began trading on the LSE last October, currently holds a 32.5% share in Vkontakte.ru. It simultaneously controls Vkontakte’s Russian competitors MoiMir and Odnoklassniki and has a minority share in Facebook as well.
Mail.ru Group recently sought to take full control of Vkontakte, but Vkontakte founder and co-owner Pavel Durov publicly ruled out this possibility last March, considering it “utopian.”
