The latest update about the Sogou rumor is Wang Xiaochuan, CEO of Sogou, admitted on May 11th that they were in talks with Qihoo on potential investment but no written agreement was reached. But a Chinese journalist heard that Qihoo offered US$400 million cash and US$1 billion worth of stock to buy Sogou (in Chinese).
It has been three years since Sogou was spun off from Sohu in 2010. It’s the third largest search engine in China in terms of market share and revenue.
The Q1 2013 the company’s revenue adds up to $39m, up by 73% yoy, and beat forecast. Behind this number, search business brought the company $27m, the navigation site $9m and gaming $3m.
Notably, Sogou has kept this rapid growing pace for the recent three years. Since 2010, the company has a record of a 23.4% compound increase rate for 11 quarters consecutively, which wins itself one of the fastest-growing companies in China Internet industry. In the last quarter of 2012, Wang left the office of Sohu’s CTO to better focus on the development of Sogou.
In a recent interview, Wang Xiaochuan shared his thoughts on the company’s current situation. (in Chinese) “After all these years’ ups and downs, we finally stepped into the center stage of the China Internet,” he said, “the so-called center stage, for me, is not only about strong profitability; for instance, operating a nice gaming business, but also about having significant influence on this ecosystem. Of course, to last the power of this influence, there needs a considerable scale and revenues.”
“Last year, we have already grown into a PC+ Wireless twin-engine driven model. So in this year, we are ready for strategic breakthrough.” What he meant by breakthrough as we have seen now should be the big change for the mobile age. April 29, Sohu’s co-president Yu Chuyuan revealed on the latest earnings conference call that Sougou’s mobile search traffic has covered 5% market share.
“The mobile search age has just started and we need some time to explore. I believe that in this new competitive structure, companies like Baidu or Google who used to be advantageous cannot profit right off it.” Wang is certain that a brand new age is coming. “In the future, the business values of mobile Internet will be tens or hundreds times that of the PC Internet.”
In the past quarter of 2013, Sougou’s mobile users are growing rapidly, as data said the active users of its mobile input method reached 100m in January. By April 15, the number for the monthly active users has already hit 127m, which is 38% up qoq.
It is known that by the end of 2012, Wang Xiaochuan has already drafted Sougou’s mobile Internet strategies by launching a series of mobile products as mobile input method, browser, maps, voice assistant and phone call manager. The company aims to update the products and improve the services in this year.
The voice assistant was released last year. Before long, this product partnered with Weixin and launched another version embedded in Weixin in this February. About this, Wang commented that “Voice will be the main entrance for the mobile search in the near future. It’s a one-stop service that bypasses hyperlinks.”
On the other hand, Wang also thought that the search box in a mobile browser and the voice assistant only exhibit limited approaches for mobile search. The call manager was developed for the sake of monetization that it can help merchants with CRM. It has been included in MIUI V5, the latest version of Xiaomi phone OS, as a default app .
In the past, Sougou successfully monetized all the way from the input method to a browser and to the search business. However, in the current mobile age, Wang Xiaochuan claimed “there should be new rules now.” Currently Sougou mobile maps claim 42m users, and the newly launched phone call manager have over 50m available data to connect online users and offline merchants.