Unsurprisingly, maps, powered AutoNavi, joined in Qihoo search family, after the one for music. Next one? Image search?Probably. Online book search, something like Baidu Wenku but more neatly and with quality content from selected partners? Very likely.
But what’s more interesting to me is some recent changes in Qihoo search related to Taobao. It was founded that some e-commerce related queries bring you result pages featuring Etao, the price comparison service provided by Alibaba, replacing its own mall.360.cn. Also, an independent search page for Taobao stores, tao.mall.360.cn, was released recently.
In 2011, about 50% of Qihoo’s online advertising revenue was from e-commerce with about 10-15%– varies due to seasonality — from Taobao. That’s one kind of revenue Baidu, by far, cannot make. Taobao blocked Baidu from indexing its content from 2008 after the latter launched Youa, a Taobao-like C2C e-commerce platform, and claimed to become the biggest e-commerce platform in three years. After Youa was shut down in 2011, there wasn’t any sign that Taobao would like to reconcile with Baidu. The fact is the bidding prices for a placements in Taobao in-site search&advertising services have been high enough.
Too high that some Taobao sellers would pay Baidu directly, at comparatively lower prices, to promote their stores. That’s where the Qhioo store search can tap into. But Baidu cannot launch such a site so long as Taobao holds a grudge. Of course, any change is possible, given Alibaba CEO Jack Mar swore they’d never do business with Qihoo CEO Zhou Hongyi when they broke up over Yahoo! China.
Post Bar? Baidu blocked Qihoo search from indexing Post Bar content right away after the latter was launched. Post Bar is one of the very few non-search products Baidu successfully built. But is the entertainment content it has so important that Qihoo’d bother to build one itself? I don’t think so. There is no lack of content sites for Qihoo to index.
Qihoo reached out to Hudong Baike, competitor to Baidu Baike (a wikipedia counterpart) as Baidu also blocked the access.
Hudong, in fact, sued Baidu for monopoly abuse and unfair competition in 2011, alleging that Baidu algorithms who favor self-made content made it hard to survive.
Considering Baidu’s huge market share, around 80% before Qihoo search launch, it has absolute power to help its own services, such as iQiyi. Baidu just announced to buy Providence Equity Partners’s stake in iQiyi, and will “integrate iQiyi’s content more seamlessly into Baidu’s overall search and mobile services“.
Baidu also has its own music and maps services, among others. It seems Baidu is becoming a vertical content service itself. But would users be satisfied with Baidu content?
According to a report released by iResearch, a third-party research agency, iQiyi ranked as the seventh most popular video sites in terms of traffic. Qihoo video search returns results from ten resources, including top eight listed in iResearch report, with ten separate tabs. Even if Baidu can help iQiyi to become No. 1 in terms of traffic, what a revenue Baidu can make most from online videos will come from ads shown in iQiyi videos, not search referrals. Can you believe that anyone would give up the lucrative search business to online video ads? But it seems Baidu will go in the same direction with music and other services.
Qihoo has made it clear that they’d cooperate with selected vertical sites to offer superior search results to Baidu’s. In return, it will receive referral fees.
Apparently almost all the market share Qihoo search has gained is from Baidu’s. The market shares of another two worthmentioning players, Sogou and Soso, didn’t show change to Qihoo’s entry. Goolge’s hongkong domain declined a little bit as it has been in the past year.
Qihoo CEO said in public that he wanted 15-20% of market share. A Qihoo investor who has confidence in the company said he’d think it a failure if Qihoo search could only make this far within two years.
To investors who bet on Qihoo, it’s always like a all-or-nothing game. It looks like risky a business given the track record of its management, especially its CEO, the chief trouble marker. What’s true, as Qihoo CEO said, is Chinese users, to some extent, have no other good choices. There is a chance.