Changyou, the online gaming arm of Sohu announced that it has agreed to acquire – a news site for games – from Sohu for US $162.5 million.

Sohu also agreed to not compete with changyou in the 17173 business for at least five years.

Wang Tao, Changyou’s chief exec commented on the acquisition saying that the deal gives Changyou a powerful base to jumpstart the company’s services and platform initiative. 17173 has strong media presence in the online gaming sector and a vast user base that Changyou could leverage to build a leading platform and one-stop-service-provider for games on top of Wang thinks that Changyou’s leading position in Web-based games and their mobile game initiatives will also give them advanced market knowledge that 17173 can take advantage of to further grow its news service more effective.

According to Charles zhang, Sohu chairman and chief exec, the transaction would help to re-align sohu’s business activities and bring together the Beijing-based company’s two leading game-wise businesses. Sohu will support Changyou’s strategy to scale its portal and services to deliver more content, tools and services to an large audience and to consolidate its market position.

Founded in 2000 by Hong Kong-listed NetDragon and later on acquired by Sohu, 17173 now is a well-established news provider and advertising medium serving both game vendors and gamers.

According to a Morgan Stanley report, the acquisition means that 17173 landed an opportunity of further expanding its business from a news site to a all-around game platform.

However, 17173 has been facing some growing pains as the site is facing down to intense competition from Duowan and Duowan ranked 104 (CN only) on Alexa while 17173 came in 142 and for 178 it’s 150. And Duowan’s traffic is also better than 17173(pictured below).

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