China's 3rd, 4th largest search engines merge in $448M deal

Summary:Chinese Internet giant Tencent's Soso will combine with Sohu's Sogou, as it looks to steal a bigger slice of the local search engine market dominated by Baidu, already under pressure from new player Qihoo.

Baidu, China's version of Google, is set to face more intense competition with the merger of its third and fourth largest rivals.

Internet giant Tencent has announced its Soso search-related business will combine with Sohu's Sogou, according to a press release on Monday.

This was part of a deal which saw Tencent invest US$448 million in cash in Sogou, giving it a 36.5 percent stake, which could further increase to about 40 percent in future. 

In the first half of 2013, Sohu's Sogou was ranked third with 8.83 percent of the market share ahead of Tencent's Soso with 3.45 percent, noted The Next Web. Market leader had a share of around 69 percent, with relative newcomer Qihoo snatching 15 percent in second spot. Google had a share of 2.13 percent in fifth place.

"This partnership will immediately expand Sogou's market presence and significantly elevate its position in the highly competitive PC search market, and even more so in the rapidly evolving mobile search market," said Charles Zhang, chairman and CEO of Sohu.

Tencent and Sogou have agreed to jointly develop, cross-promote and integrate their respective products and services, while collaborating in areas of search technology, user insights and data sharing. Sogou's leading products, including Sogou Pinyin and Sogou Search, will gain direct access to the massive user base of Tencent's online and mobile social communities.

The news is likely to quash the possibility that Qihoo will acquire Sogou for US$1.4 billion as speculated in July.

Topics: Tech Industry, China

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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