Sogou Levels up Competition via Soso Takeover?

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Latest rumor has it that Sogou was in talks with Tencent about a potential buyout of the latter’s search engine effort Soso.com, which echoes Mr. Wang Xiaochuang’s prior hints that the company would have a bold move on capital after Chinese New Year. The claim was previously interpreted as a signal for the long-awaited IPO for the third largest Chinese search engine which just lost its second place to Qihoo’s up-and-comer So.com search initiative.

Sogou might take over Soso’s desktop search business and then launch an across-the-board consolidation with regards to teams, channels, traffics and strategies between the two entities.

The rumor came at a time when Qihoo’s new So.com kept gobbling up Sogou’s market share, cornered Sogou to the second place in the market with about 7.95% share, according to Chinese market researcher CNZZ’s latest stats. Qihoo’s So.com currently claimed more about 10.5% of the market share, only next to Baidu’s 72%. Since Tencent’s Soso.com holds about 3.5% of the market, the acquisition could push Sogou back to the runner-up position.

In a response to this market speculation, Mr. Wang told local media Phoenix New Media (ifeng.com) that “Sogou doesn’t comment on rumors…we were said to partner with 360 on search before”.

Image credit: Soso.com