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?