(Adds management comments on market share gains and dividends, share price, details)
MOSCOW, April 27 (Reuters) - Russia's largest internet group Yandex on Thursday raised its sales outlook for the year after settling a dispute with Google over product distribution on the U.S. company's Android operating system.
Google announced a deal with Yandex and Russia's competition watchdog on April 17, pledging to stop requiring manufacturers of Android-based devices to pre-install its search engine and other applications.
Yandex expects the settlement to "open the door to market share gains on mobile (devices) in 2017 and beyond," Chief Executive Arkady Volozh said in a statement.
Yandex is the largest internet search engine in Russia, but has struggled to increase its share of this market on mobile devices, most of which use Android.
The company's overall share of the Russian search market, including mobile, was flat quarter on quarter at 55.4 percent but down from 57.6 percent a year earlier.
Yandex said on a conference call on Thursday that the Android case settlement's impact on the company's market share would be skewed to the second half of the year.
The company now expects 2017 revenue growth of between 17 and 20 percent, having predicted in February a rise of 16-19 percent. First-quarter revenue jumped 25 percent.
The company also said its cash pile stood at 61.4 billion roubles ($1.08 billion) as of March 31.
Yandex said in February it did not rule out that its board of directors could discuss the possibility of a maiden dividend payout at one of its meetings this year.
"Clearly we do see an increasing confidence about the overall economic backdrop," Greg Abovsky, Yandex chief financial officer, told a conference call when asked about the prospect of a dividend payout.
"We do believe that we are in a better position, we have a strong balance sheet and we've just hedged out two years worth of office lease expense so I think the board will feel more confident about making a cash distribution decision now than it has before," Abovsky said.
The company increased adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) by 19 percent in the first quarter to 6.9 billion roubles on 20.7 billion roubles of sales.
Net income was down 23 percent to 0.8 billion roubles due to a 2.2 billion rouble foreign exchange loss, while adjusted net income rose 18 percent to 3.7 billion roubles.
It said online advertising revenues grew 23 percent, adding that its online taxi booking service was a major growth driver with sales up 75 percent.
Nasdaq-listed shares in Yandex were up 5.8 percent in early trade on Thursday at $26.30. ($1 = 57.0386 roubles) (Reporting by Maria Kiselyova; Editing by Jane Merriman and Toby Davis)