Yandex search launched in 1997, a year before Google. It was the only search engine that could understand Russian morphology.

It was also very good! I much preferred its results to Rambler which was popular at the time (and the developer behind Rambler wrote ngnix, afair).

That's OK. There were many engines before Google that were forgotten. It is completely possible that Yandex search for average Russian is better than Google but my impression is that it is not (my impression might be wrong). I know that there are some services that Yandex does better than Google in Russia.

I don't get your point. Are you suggesting that they should had shut down the company once Google appeared, and the reason they didn't is "Russian pride"? WTF?

No. I'm saying that Russian market has chosen solution that's not necessary is the best one. Again, maybe I'm wrong.

do you remember altavista.digital.com?)

Yes, I remember that it was almost impossible to find anything with it in Russian.

Why it shall be otherwise, especially with 4 different Cyrillic encodings and size of .ru segment these days?