Russia is working through an extremely traumatic recent history. It lost its status as a global superpower in the 1990s, dealt with hyperinflation and a crashing economy, rebounded and then was clobbered again as a result of the global financial crisis.

Given all of those radical changes of fortune, it is little surprise that the country’s political situation can be unstable. The Russians also have a penchant for nationalization. Notably, its leaders a few years ago took steps to bring energy production back under state control, which can make investing in the country extremely unpredictable.

Investors should generally remain wary of Russia. That said, interesting opportunities are emerging in the nation’s technology sector.

Despite its dubious politics, Russia has historically invested heavily in educating its citizenry. According to a report issued by the College Board in 2010, Russia is the most highly educated country in the world, with 54 percent of Russians between the ages of 25 and 64 holding an associate degree or higher. The United States ranked 12th on that list, at 40.4 percent.

Many of those highly educated Russians have sought opportunities in the technology sector, particularly since the country has long ranked highly in mathematics and science. As a result, three years ago the government began the Skolkovo Innovation Center initiative to provide support to the country’s budding technology entrepreneurs.

The goal is to rival Silicon Valley. In fact, just last month members of the initiative toured the San Francisco Bay area pitching for funding. Over the past few years, US technology concerns such as Microsoft (NSDQ: MSFT), Cisco (NSDQ: CSCO) and IBM (NYSE: IBM) have all invested in Skolkovo to tap into Russian innovation and access relatively cheap knowledge workers.

The National Aeronautics and Space Administration has implicitly endorsed Russia’s technological competence, inking a USD1 billion deal to send American astronauts to the International Space Station using Soyouz spacecraft.

One promising technology company emerging in Russia in recent years is Yandex (NSDQ: YNDX), Russia’s answer to Google (NSDQ: GOOG).

While many Americans consider Google to be the definitive search engine, Yandex controls more than 60 percent of the Russian Internet search market with more 55 million unique users per month in Russia. By comparison, Google has just 26 percent market share in the country. Yandex also is the largest Internet business in Russia, with USD947 million in revenue last year and the leading online advertising platform in the nation with 300,000 advertisers in the first half of this year.

Russia is home to one of the largest Internet markets in the world with about 100 million users, but it’s still vastly underdeveloped with an Internet penetration rate of about 56 percent. By way of comparison, the US penetration rate runs at about 75 percent while in the UK it is closer to 88 percent. In terms of potential organic growth, Yandex could rival Google in terms of the number of Russian users alone in just a few years.

But Yandex isn’t solely reliant on web searches for growth.

Just as Google offers its Chrome Internet browser, last year Yandex.Browser was launched to keep users more within Yandex’s grasp. In addition to offering greater advertising opportunities, the unveiling of its own proprietary browser allows the company to collect more user data to better tailor its search results.

So far, Yandex.Browser holds a 5.5 percent audience share of browser users and nearly 10 percent of all Internet searches occur within the platform. Growth of that market share is likely to accelerate, with the browser recently being adapted for use on smartphones and tablets, both of which are enjoying explosive growth in the Russian market.

Yandex recently expanded into its first international market, launching its Islands search platform in Turkey.

About 46 percent of Turkey’s 80 million people are Internet users. More than 2 billion webpages are registered in the country. Overall, the country’s online ad market is valued at about USD234 million.

So far, Yandex has only managed to capture about 2.5 percent of the Turkish search market, but it has made huge strides in brand recognition, with 84 percent of Turks saying they have heard of the search engine. As a result, the number of Turkish Yandex users has been growing by about 400 percent on a quarterly basis.

Given that huge growth, Yandex’s revenues have averaged better than 40 percent year-over-year growth since 2010. Earnings per share have managed 39 percent growth over the same period, reaching RUB8.91 in the second quarter.

For the full-year, analyst estimates and the company’s own guidance both look for better than 50 percent earnings growth, reaching RBL36.85 for 2013. Next year’s estimate falls around RBL44.00.

QIWI (NSDQ: QIWI), the Russian version of eBay’s (NSDQ: EBAY) PayPal, is also an up-and-coming Russian Internet play.

The company went public in May, so there isn’t much operational data available yet. But QIWI is the largest electronic payment network in Russia, with kiosks that allow users to convert cash into electronic money and offering electronic wallets to access those funds via the Internet and smartphones.

Last year, the company had USD15 billion in total payment volume with more than 60 million monthly customers in seven countries. Adjusted net revenues clocked in at USD136 million with 24 percent compound annual growth; the operating margin was 48 percent.

With Russian eCommerce growing at a 44 percent compound annual rate and valued at nearly RBL2 trillion (USD12 billion), demand for electronic payment services should continue growing at a phenomenal rate. By the end of the next decade, Internet retail sales are expected to reach 7 percent of all retail sales in Russia.

Continued growth in Internet penetration will continue driving ecommerce growth, which requires money transfer systems to be in place. Given the Russian preference for homegrown companies, that will result in accelerating profits for QIWI, which are forecast to run in excess of 25 percent over the next several years.

Given that QIWI’s business isn’t particularly capital intensive, free cash flow should run in excess of 85 percent of earnings before interest, taxes, depreciation and amortization (EBITDA) and fund rising dividend payments by the company. In June, QIWI paid USD0.26, followed by USD0.30 in September with a special dividend of USD0.252.

But just because Yandex and QIWI are attractive Russian technology plays doesn’t mean they’re without potential risks and, as usual, the Russian government ranks at the top of that list.

As with many other countries in the world, Russia has always limited foreign investment in sectors such as energy and defense. But for good measure, the government recently proposed designating some technology companies as “strategic,” further curtailing foreign investment.

With regards to Yandex, I see that risk as relatively minimal considering the nature of its business but, given Russia’s concerns over capital flight and money laundering, it is possible that it could move to exercise greater control over QIWI in the form of tighter regulation.

That said, I don’t see the government moving towards taking outright control.

In 2009, Yandex sold what has come to be called a “golden share” to one of Russia’s state controlled banks, essentially giving the bank veto power over any change of control. The primary aim there isn’t to necessarily prevent another Russian firm from acquiring the company, but to thwart any foreign takeover bids.

Considering QIWI’s recent listing on the US NASDAQ Exchange, I wouldn’t be surprised to see the Russian government pushing the company into selling a similar golden share. But that shouldn’t impact that company’s valuation.

Both Yandex and QIWI are attractive speculative bets up to 40.