Four months ago we heard that Sogou, majority-owned by Sohu, was looking for a potential buyer or strategic investor, and all major players in China’s search market, Baidu, Qihoo and Tencent, showed interest. Back then it is rumored that Charles Zhang, CEO of Sohu, would like to introduce Baidu while Wang Xiaochuan, CEO of Sogou, would rather choose Qihoo.


source: CNZZ

The end of the story is Tencent who also married his daughter Soso to Sogou. Now Sogou and Soso have a combined of 14% of search market share, according to CNZZ, a third-party online data service. Without Sogou, Qihoo needs some more time to have a quarter of China’s search market, but it has gained 18% share in just one year. In the past months Qihoo also pocketed Youdao— its market share is minor though.

Now Google China has no more than 3% in market share. It seems Baidu and Sogou benefited from Google China’s retreat from mainland China. Sogou’s market share continued increasing incrementally, but Baidu’s has declined to 63% thanks to the rising Qihoo 360 Search.

Which one of the three kingdoms will win out? Qihoo, the most aggressive of the three, just started monetizing its search service not long ago and expanding on mobile; Sogou now has a powerful father-in-low who may help it expand market shares in search and other Internet product markets. Baidu’s goldmine is shrinking and the competition in digging gold in mobile market was fierce. Before the acquisition of 91 Wireless, Baidu had no offspring or relatives to count on.

It is expected that Sogou and Qihoo will continue gaining PC-based shares from Baidu. Sogou has a similar business model to Qihoo’s. Both of them gained a large user base with a good and free Internet service, successfully converted a part of them into their browser users, and monetize browser traffic through display advertising and paid searches.

Sogou has seen search revenue climbing. Like Baidu, it started up as a search service. Its parent company to some extent gave up the business till Sogou Chinese Input Method became one of the most popular Input services in China. Tencent may value the linkup with Sogou greatly for all the products of Sogou, search, browser, Chinese Input method and some small but innovative services, are where Tencent did poorly. The traffic and effect would be huge if Tencent helped channel users to Sogou’s products.

Apart from monetizing search traffic on PC, Qihoo has been well positioned in the mobile world in terms of app distribution, especially when it comes to mobile games. It also developed Leidian, a service for users to search for and manage mobile content. It could be easy for it to channel existing users to it.

$1.85 billion may be too high a price for acquiring an app distributor like 91 Wireless, but it may become one of most valuable asset of Baidu’s several years later as mobile Internet has a lot to do with apps. Yes, Baidu rolled out this LightApp project, but it’s hard to know whether Baidu platform is still appealing enough on mobile that developers would bother to do a WebApp version of their services to Baidu standards.

Speaking of mobile search, everyone knows it will be a different story. But we don’t know how different it will be. Wang Xiaochuan, CEO of Sogou, said on a variety of occasions that he believed mobile search would be completely different from PC-based search. That’s why Sogou has been developing a recommendation engine.

Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at

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