The next hot IPO may be an American Depository Reciept [ADR] from Russia - Russian Search Engine Yandex.
In Russia, the BRIC country benefiting most from the current energy boon, citizens rely on the search engine Yandex much more than Google for their search needs. While Google is fighting for leadership in several markets, it's losing in Russia. Yandex currently holds a 45% search share, beating Google's 35%.
The upcoming listing on the Nasdaq is expected to bring as much as $2 billion. Yandex derives the majority of its income from advertising and it's been growing at roughly 100% per year (130% over 2006!), with 2007 coming in at $167 million.
While Google is larger and more adept with respect to algorithms, monetization and is of course, the premier search outfit in the world, Yandex has its own advantages. Just as Google has not been able to unseat Baidu.com in China, it may have an uphill battle in Russia. Yandex has a nationalistic Russian base, whereas Google is seen as the global giant - and American.
While Google may overtake Yandex in specific niches like YouTube and other high barrier strengths, the overall lucrative search market will continue to grow significantly for Yandex. Due to the rapid growth of internet usage in Russia, even if it simply maintains or even slightly loses market share, Yandex should do extraordinarily well. Just 25% of citizens utilize the internet today in Russia, and broadband usage is expected to grow at close to a 100% clip over the next couple years.
Disclosure: Obviously, no position in Yandex at this time, but come IPO opening day, I might partake.