Hi Anton - welcome to the forum

Yes I see Yandex as having some key stengths over here that have kept Google at bay however they have made some ground recently, overtaking Rambler for second position. I remember them saying at the recent Internet & Business Conference (c-ib.ru) that they didn't need to advertise here in Russia (they would rely on word of mouth etc.). It was met with some skeptism by the audience but they have slowly increased market share over the last year.

Like you I also notice a high quality in Yandex Direct at the moment (conversions). Personally I think that has more to do with their selective approach to adding sites to the network rather than the mechanics of the system. It must be a tough decision for them whether to let the masses (blogs/forums) in on that. On the one hand they don't want the webmaster base to align themselves with Google through Adsense but on the other, they could easily loose the quality advantage.

Still Russia is a great market to be involved in and I do respect the knowledge of all the Yandex guys I've met (and of of course Arkady Volozh, who is amazingly down-to-earth and friendly). As long as they keep up this growth and speed of development, I definitely think they have what it takes to hold top position here. I can also see them taking the fight into other markets as well, Ukraine you mention but there are plenty of other opportunities out there.