Shares of Russian search engine Yandex climbed about 40 percent in their stock market debut Tuesday.
The strong opening _ especially following the huge first-day pop that jobs networking website LinkedIn Corp.'s shares enjoyed last week _ highlights demand for Internet stocks.
Yandex raised $1.3 billion in an initial public offering late Monday that was the biggest for a U.S. Internet company since Google Inc. went public in 2004, according to IPO research and investment fund Renaissance Capital.
The initial share price of $25, already higher than the expected range of $20 to $22, gave Yandex a total market value of $8 billion. By midday, the shares were trading on the Nasdaq at $35.
LinkedIn shares priced at $45, then more than doubled in their opening day Thursday and remain up about 97 percent in a run-up reminiscent of the late-1990s dot-com boom.
LinkedIn's IPO attracted interest to the Internet sector and likely helped drive up demand for Yandex's shares, said Renaissance Capital analyst Stephanie Chang.
Yandex NV is Russia's most-visited website. It generated 65 percent of Russia's Internet search traffic in the first three months of this year. Google, which Yandex says is its biggest competitor, has 22 percent of Russia's Web search market.
It plans to use the funds from the IPO to invest in new servers and data centers and perhaps for acquisitions and investments.
Like Google, Yandex makes money from advertising. It places text ads next to users' search results and on other websites. When calculated in rubles, Yandex's revenue grew 43 percent and its net income shot up 90 percent during 2010.
In dollar terms, Yandex posted net income of $134.3 million on revenue of $439.7 million last year. Google earned $2.3 billion just in its most recent quarter, when its revenue was $8.6 billion.
By buying stock in Yandex, investors are betting on growth in Internet use in Russia. The company says 43 percent of adults in Russia were online in 2010, a much smaller share than in Western Europe and the U.S., and it says more than 70 percent of Russian adults are expected to be using the Internet by 2014. Russians are getting wealthier, and faster, cheaper broadband Internet spreads to the country's remote regions.
Yandex sold 15.4 million shares in the IPO. Stockholders including company founder and CEO Arkady Volozh, investment company Tiger Global and Russian private equity firm Baring Vostok sold another 36.8 million shares. Underwriters could buy another 5.2 million shares if demand warranted it.