Russian-Language Web Portal Blooms

By Brian Humphreys

An e-mail service offered by the 10-month-old Port.ru has bloomed into the biggest provider in Russia, with well over half a million subscribers, the company said. The service, Mail.ru, is similar to other popular, free Internet mail services, like Hotmail and Yahoo!, but is tailored specifically for Russian-speakers. Since the company first offered the Russian-language Port.ru Internet portal in November 1998, the service has gained 650,000 subscribers, mostly in Russia, company officials said.

"The Russian-speaking Internet market is underdeveloped," Eugene Golan, the 29-year-old founder of Port.ru, said. "The market is only forming now." Aiming to get in on the action, the St. Petersburg native decided to set up Port.ru in November 1998 as a portal for Russian speakers. Golan, a resident of New York, spun the portal off of DataArt Enterprises, an Internet-based software consulting firm he founded in 1995.

Earlier this year, Port.ru drew $1 million in outside investment through a private placement by a venture capital company in New York, but it has yet to turn a profit.

"Internet businesses always present themselves as a long-term gain to investors," Golan said in a recent telephone interview. "It takes years to build." With less than 2 million Internet users, the Russian market is a difficult one for e-commerce. Indeed, only a handful of companies have made a profit on the Russian Internet, and none offer free content like Port.ru. Most of Port.ru's income currently comes from conducting market research polls for advertisers via its web site, Golan said. Users are asked general questions, the answers to which can be matched with a database of consumer preferences.

Golan said the polls are valuable to advertisers because Internet users in Russia tend to represent people with better educations and higher incomes than the general populace.

He added that posting ads directly on the free mail site does not bring in significant income yet because the Internet advertising market is so small in Russia.

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