Chinese search engine Sogou files to list on NYSE

Tencent is the biggest winner from Sogou's listing in the US as it owns the biggest stake in the Chinese company, even more than Sogou's parent, Nasdaq-listed Sohu.

Chinese mobile search provider Sogou said on Friday that it has filed initial public offering applications to the US Securities and Exchange Commission with the aim to raise up to $600 million on the New York Stock Exchange (NYSE).

The Beijing-based company will be traded under the stock symbol "SOGO", according to Chinese media reports. A number of international banks including JP Morgan, Credit Suisse, Goldman Sachs, and CICC will be serving as joint book-running managers and representatives of the underwriters.

The news of Sogou filing IPO applications boosted shares of the Nastaq-listed Sohu by 13 percent on Friday.

Sogou's parent company Sohu owns 37.8 percent of its stake, according to the prospectus. Sohu's CEO Zhang Chaoyang and Sogou's CEO Wang Xiaochuan own 9.2 percent and 5.5 percent, respectively.

Since September 2013, Tencent has been the largest shareholder of Sogou and has been using it as the default search engine for its products, said Chinese reports. Tencent owns 43.7 percent of shares in Sogou, and has contributed 38.2 percent of the traffic for Sogou's search engine as of June 2017, the report added.

The cooperation between Tencent and Sogou will further extend to other Tencent products and will last until 2023, said the report.

Sogou owns four major business segments including Sogou's search engine, Sogou input method, and intelligent hardware. Its search engine business has always been its core business as well as its main source of income.

The prospectus indicated that Sogou's total revenue for 2014, 2015, and 2016 was $386 million, $592 million, and $660 million, while its search and search-related advertising revenue for the three years came to $358 million, $540 million, and $597 million, respectively.

Baidu remains the dominant search engine in China with about 80 percent of market share in the country, with Sogou ranking fourth, owning about 2.5 percent as of June 2017, according to a Chinese report citing StatCounter data.