img: pinyin.sogou.com/zhihui

Sogou released a major update of Sogou Pinyin, the dominant Chinese Input software in China, adding a new feature called something like “mind-reading” to the “intelligent edition” that echoes what Wang Xiaochuan, CEO of Sogou and former CTO of Sohu, referred to as this year’s “big move”.

When a user types out the Pinyin (currently used romanization system for Chinese) of a video’s name, the Sogou Pinyin interface would feature the video directly – no search box and no need of click on a search button. Besides online videos, it enables another eight categories of content, including music, weather, app downloading and other Internet services.

Pinyin for “Train Ticket” returns a web service for train ticket information.

Whatever shown are from partners who, according to Sogou, haven’t been charged. But it’s not hard to imagine it will drive revenue before long.

It looks like a combination of Baidu’s Box Computing and Tencent Soso context search. When you type in the name of a video in Baidu search box, the first search result would feature the video and users can watch it within the search page by merely clicking on a play button. Tencent QQ users could select words in the dialog box of the chatting software and trigger search by clicking on a button. Search results will be shown on the right side of the dialog box. Adding the Sogou one, it seems what those big Chinese Internet companies always want is to keep users within their signature product.

Bypassing Browser

It’s no secret that Sogou adopted the Qihoo approach to monetize its huge input software user base, channeling users gained there to its browser where start-up page ad placements, search service, online games and the like are revenue sources. Wang Xiaochuan always compared Sogou to a three-stage rocket with the input software, browser and search service as the three sub-rockets.

Both the two companies began developing their killer services, Qihoo’s Internet security service and Sogou’s input software, around 2006. But the competence is all about browser, as Charles Zhang, CEO of Sohu, said on its latest earnings conference call.

Qihoo has run much faster in browser market and have gained a dominant market share, with 310 million active users as disclosed in its latest earnings release. According to CNZZ, a third-party data service, Qihoo browsers have a 28.44% market share and Sogou’s has 8.85% in February 2013. The room for Sogou is limited.

Sogou’s revenue in 2012 is $131 million, 40% of Qihoo’s albeit with a 108% year-over-year increase. It had a net loss of $2 million while Qihoo made $ 97 million in net revenue.

It seems Sogou finally came to realize, or decide, that there’s another way around besides browser in order to expand realm and reach advertisers and consumers’ pockets. And it has become obvious that browser cannot play such an important role in mobile ecosystem that users access Internet services through apps. Wang Xiaochuan pointed out at various occasions that mobile search would vary from that on the desktop, too. The company rolled out Sogou Voice Assistant, Siri-Like voice interactive service, last year.

The question with the new feature is whether it is acceptable with and used by input method users. Either the Baidu Box Computing or Soso context search doesn’t seem a success. It’s hard to say whether Sogou can make a difference with a combination.