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Verbal joust between Qihoo and Sohu escalates to lawsuits; Qihoo may strangle Sohu traffic

  • Things have turned bitter between Qihoo (QIHU) and SOHU after the latter sold a 36.5% stake in its Sogou search unit to Tencent instead of to Qihoo, as had been speculated. After trading barbs publicly, the two companies are now suing each other over allegations that both companies' software is switching users' browser preferences without permission.
  • Beneath the surface of verbal and legal jabs, Qihoo may damage Sohu in a more material way. Wedge Partners analyst Juan Lin notes, "A significant share of Sogou’s search traffic is through traffic acquisition (around 40%) and directed by the Sogou browser. Since Qihoo’s PC anti-virus software has penetrated into over 90% of Chinese internet users, we think it may create difficulties for Sogou to further develop its search engine and browser."
  • Further, "[T]here is a risk that Qihoo will reduce the traffic it directs to Sohu video. Currently around 10% of Sohu video traffic comes from Qihoo, and the share has been increasing rapidly."
Comments (3)
  • Qihoo is such an aggressive company. In some ways that has helped them a lot as China's internet is a bit like the wild west. That said, Qihoo has made enemies with most all of the other internet companies and people I know in China (particularly more tech savvy young people) view their products as manipulative (like constantly telling users they need to install more Qihoo software that isn't needed) in how they get themselves on your computer (and hard to get off).
    26 Sep 2013, 06:14 PM Reply Like
  • I use Sogou or Baidu, if not on
    26 Sep 2013, 09:36 PM Reply Like
  • Although there may be some negative effects on search traffic from the Qihoo & Sohu/Sogou spat, what about potential positives effects from Tencent tie-up?
    27 Sep 2013, 01:08 AM Reply Like
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