China’s Baidu under pressure as third- and fourth-placed search rivals team up in $448m merger

Rumors were aplenty that Chinese tech company Qihoo 360, which launched a search engine of its own last year, was at the forefront to purchase Sohu’s Sogou search engine — but they were wrong.

Chinese Internet giant Tencent has just announced that it has invested a net amount of $448 million in Sogou — and now holds a 36.5 percent stake in Sogou, which could increase to approximately 40 percent in the near future. It has also merged its Soso search-related business with Sogou.

This move marks Tencent’s efforts to step up its presence in the search market as it seeks to become a credible rival to Baidu — China’s version of Google which has been dominating the market — as well as Qihoo, which launched its search engine in August last year and quickly jumped into second place.

According to a report summarizing China’s search market rankings in the first half of 2013, Sohu’s Sogou and Tencent’s Soso occupy third and fourth place respectively, with Sogou taking 8.83 percent of the traffic share and Soso having 3.4 percent. Combining the two of them is a clear indication that Tencent wants to have a greater slice of the search market pie.

Sohu’s chairman and CEO Charles Zhang says: “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.”

Headline image via Thinkstock