US investment firms prop up ad revenue for Russian propaganda sites

“Investors need to also think through how their money is being used, where that money is being invested, and how they can contribute to isolating Russia and Russian companies.”

SOURCEBureau of Investigative Journalism
Image Credit: FERENC ISZA/AFP via Getty Images

A company owned almost entirely by Western investors has been used to help sites pushing false Russian claims make thousands of dollars a day through on-site adverts.

Yandex is known as the Russian Google and, like its bigger and more famous counterpart, runs both a search engine and an extensive digital advertising business connecting brands and companies to online publishers.

In the past month the Bureau has documented Yandex-delivered ads appearing alongside misinformation and propaganda produced by more than half a dozen Russian-language news sites. In total, the sites attracted more than 420m visits in February, according to SimilarWeb, suggesting they could cumulatively be making tens of millions of dollars each year from digital adverts, all channelled through a business owned by some of the world’s biggest investment companies, most based in the US.

“A big part of online disinformation and online propaganda is that it’s quite profitable financially,” said Jane Lytvynenko, a research fellow at the Shorenstein Center at Harvard who specialises in analysing misinformation. “And so cutting off that revenue stream, I think, is very important.”

The Bureau found ads running alongside false stories about US bioweapons labs in Ukraine, claims that President Zelensky is displaying symptoms of drug use, and reports parroting Russian claims that the “special operation” is going entirely to plan. Others detail supposed provocations by Ukraine aimed at Russia’s ally Belarus or separatist regions, or refer to the Russian invasion as an “operation to denazify and demilitarise Ukraine”.

While Yandex is headquartered in Moscow, it is listed on the New York Nasdaq under a company registered in the Netherlands. Analysis by the Bureau shows that the vast majority of its shares are owned by investors based in the West, in particular the US. Among them are some of the world’s largest investment firms, asset managers and banks.

As of March 16, Yandex’s largest single shareholder was Capital Group, an asset management fund with trillions of dollars under management, which owns a 13% stake in the company. The second and fourth largest shareholders were also huge asset management firms, Invesco and Fidelity.

Capital Group said it had a longstanding policy not to comment on its holdings, but added: “Our hearts are with the Ukrainian people and all those harmed by this war.”

Fidelity said it had decided not to purchase Russian securities in light of recent events, and would consider eliminating its current Russian holdings.

“Investors need to also think through how their money is being used, where that money is being invested, and how they can contribute to isolating Russia and Russian companies,” said Lytvynenko. “Especially as they spread propaganda worldwide.”

Among the top ten shareholders, only two are not big Western investment firms: a family trust in the name of Yandex founder Arkady Volozh, and a former executive at Yandex. More than half are based in the US. The company’s share structure means that Volozh and other directors, officers and employees control more than 50% of the voting power, but only about 11% of the dividend-paying shares.

Yandex’s share price has almost halved since the invasion of Ukraine. GrubHub ended a partnership to create food delivery robots, while Uber announced it was accelerating plans to cut ties with the company. Tigran Khudaverdyan, Yandex’s deputy CEO, resigned on 15 March after being added to the EU’s sanctions list. The company itself has yet to be sanctioned, despite calls from some MEPs.

Some of the sites documented by the Bureau have direct links to the Russian state. The Bureau found Yandex serving ads on the website of the state news agency RIA, and two offshoots of the state-owned Sputnik, the latter of which has been banned in the EU.

One of the largest sites, with more than 177m visits in February, was Lenta.Ru. Lenta is part of Rambler, a media group that was bought in 2020 by Sberbank, Russia’s largest bank, which is state-owned and sanctioned by the US and the UK. The Bureau confirmed that Lenta.Ru was using Yandex’s video advertising up until at least March 10.

Outlets not believed to be directly linked to the Russian state include the website of Tsargrad TV, sometimes described as the “Russia’s Fox News”. Tsargrad was set up in 2015 by Konstantin Malofeev, a banker sanctioned by the EU, US and Canada in 2014 for his involvement in Russia’s annexation of Crimea, and added to the UK sanctions list earlier this month. The channel has pushed the values of the Russian Orthodox Church and offered support for Vladimir Putin’s patriotic agenda.

Tsargrad TV’s parent company also appears to be connected to another site examined by the Bureau, Novorossiya. The site’s name roughly translates as New Russia, a term that was used by the Russian Empire to describe an area that included Crimea and other parts of what is now Ukraine. The term is now associated with Russian-backed separatist groups in Ukraine. The web domain for Novorossiya was first registered in May 2014, just weeks after the beginning of Russia’s annexation of Crimea.

Tsargrad and Novorossiya between them attracted more than 45m visits in February, according to SimilarWeb.

Lytvynenko told the Bureau that the news sites in effect “essentially legitimise information that might be circulating on social media. If something is covered by anyone’s website, then it may be seen as more authoritative than an account on social media. And so we do see a sort of circular narrative happening, where this information is seeded on social media and through these more mainstream websites, and has been repeated and legitimised online.”


If you liked this article, please donate $5 to keep NationofChange online through November.