Mail.ru launches in America as My.com, CEO admits Russian government could grab user data
On the surface, Dmitry Grishin looks like your average middle aged techie. He rocks a casual button down on top of a pair of jeans and he’s gripping a giant beverage* like his life depends on it.
But when he opens his mouth, his thick Russian accent reveals itself. Although he’s fluent in English, he’s only just decipherable through the hard R’s and throaty vowels.
Grishin has spent his entire life in Russia, building Mail.ru: a technology company that’s a household name in Russia, if not yet in the United States. It launched it around the time of the dot com boom to become the Yahoo of the Motherland. Grishin, now its CEO, would prefer you compare it to eBay rather than Yahoo. “It’s not like it’s old and you don’t want to use it,” Grishin says defensively. “eBay is a closer analogy. It’s older but nothing has replaced it.”
With links to various categories of content, an email service, and an auction site, Mail.ru was one of Russia’s first big domestic web products. At the time Internet providers charged more for connectivity to international sites like Yahoo, leading Russians to adopt Mail.ru in droves. The service expanded rapidly, almost as rapidly as the funds from investors disappeared following the dot com bust.
After years of bootstrapping, barely getting by financially while traffic expanded exponentially, Mail.ru started attracting big advertising dollars in 2003. It has been chugging along healthily ever since, amassing what Grishin estimates is half of the country’s email accounts.
The company is so healthy, in fact, that Mail.ru’s executives decided it should spread to other markets. You’d think they’d choose to go after a developing nation, where there’s a little less competition, but no.
Grishin wants to take over America.
In November 2013, Mail.ru launched its first offerings in the United States under the brand My.com: a “MyChat” messaging service, a “MyMail” email management app much like Mailbox, “MyGames,” and a @my.com mobile email client. Since then it has been growing steadily, at a rate of 10,000 new users a day.
That's great news for the huge Russian corporation but perhaps less great for American national security concerns.
Thanks to the NSA, the Russian government has recently realized that the Internet is a wealth of intelligence. Officials have become wary and skeptical, worried about how much information foreign nations might be collecting through Western companies like Facebook, Google, and Twitter. They’re not too pleased that the American intelligence community has access to such data, putting Russia at a disadvantage.
The Atlantic reports that the Russian state Duma council recently passed a law that requires foreign companies to keep some of their servers within Russian borders. Another law reportedly recommended by Vladimir Putin would give the government access to filter all Russian server content.
Here’s how Pando's Yasha Levine put it in his story on these new Internet censorship policies:
Just look at it from Russia’s point of view: Imagine that some of the most popular email, messaging, social networking sites and mobile phone platforms in America were run by Russian companies. Imagine the digital information of several hundred million Americans — private and business info — would be siphoned out of the U.S. and stored on servers located in Russia, where it would be out of the reach of U.S. courts and subject only to Russian law. Imagine further that all the information that passed through these services could be legally obtained by the Russian government and the FSB with a simple court order…but completely out of reach of US authorities. Oh, and on top of everything, imagine that some of these Russian companies have extremely close ties and tech-sharing agreements with Russia’s military and intelligence community.
Well, now one of Russia’s most popular email, messaging, social networking, and mobile app companies is trying to make it big in the US. Looks like the tables have turned.
Mail.ru servers aren’t located in Russia — they’re in Amsterdam — but Mail.ru, which is headquartered in Moscow — is certainly operated under the jurisdiction of the Russian government. Furthermore, a Russian oligarch who is very close to Putin, Alisher Usmanov, reportedly owns a third of the company.
We’re not saying that mail.ru is setting up shop in America in the hopes of gathering information on American users. Certainly not. But the development does raise some national security concerns, particularly if the service gets massively popular in the States. Does the Russian government have control over the data collected? What are the Russian laws governing user privacy? Should American My.com customers think twice before trusting a Russian technology company?
When pushed on the security concerns, particularly the new law regarding foreign companies storing servers on Russian soil, Grishin conceded that government’s actions are unpredictable at the moment.
“This is a new law and nobody knows how it will work. There’s a lot of questions about how it will be executable,” Grishin says.“[The Russian government] is looking at what the US is doing and saying, ‘Can we apply it and how?’ Sometimes they take good things and sometimes not very good things. They’re in transition, understanding how to deal with the Internet,” Grishin says.
If the Russian government is taking cues from the NSA on how to deal with data collection on the Internet, that’s terrifying. It’s also not exactly a great endorsement of Mail.ru’s security for customers.
But Grishin isn’t concerned. He pointed out, rightly so, that sovereign nations all over the world are trying to figure out how to regulate the Internet. This isn’t a concern only afflicting Russia. He believes that consumers, by and large, don’t spend much time thinking about the origins of the company handling their sensitive data. “From my perspective I believe technology has no politics and no borders,” Grishin says. “People just don’t think about it how you think about ‘Russia, Europe.’ They think, ‘What is the best email client?’”
With the NSA scandal, it’s a rather interesting time for one of Russia’s biggest tech companies to turn around and choose to expand to the US. Of all the markets in the world it could go to, it picks the most saturated. “We think the American market is the most exciting and most difficult,” Grishin says. “If you want to be strong you should build something strong here.”
[* Editor's note: After this story was published, we received a series of emails from Mail.ru's US press representative, Jason Mandell, objecting to our assertion that his client was drinking coffee during his interview with Pando...
The second sentence states, "he's gripping a giant cup of Starbucks coffee like his life depends on it." This is [false]. Dmitry [Grishin] did not drink coffee or anything from Starbucks in the meeting. I'm not even sure he drinks coffee at all."
In the original story we assumed that Mr Grishin's cup contained coffee. We are happy to clarify that it did not. We regret the error.]