sohu

Alibaba buys shares in Sogou search engine

10
Aug
Sogou-logo

China's No.2 Internet portal Sohu will sell 32% of its Sogou search engine to investors, including top Chinese eCommerce company Alibaba Group.

Sohu sells shares of its Sogou search engine

Sohu will actually sell 16% to Alibaba Group, parent of Hong Kong-listed Alibaba.com and Yunfeng fund, co-founded by Alibaba Chairman Jack Ma, and another 16% to a fund invested by Sohu Chairman Charles Zhang. The remaining 68% of Sogou will be held by Sohu.

When it launched Sogou, Sohu had big hopes for its wholly-owned search engine, but it has failed to gain market share against Baidu and Google during the past few years. The deal with Sohu will help Alibaba expand in the nation’s $1 billion search-engine market.

However, an alliance with Alibaba could help its prospects, as Alibaba currently prohibits Baidu from cataloging material from its eCommerce pages in its search results.
 

Sogou is China's third-biggest search engine

According to data from iResearch, Sogou is China’s third-biggest search engine service, though its market share of 0.8% last quarter is a fraction of Baidu’s 71%, and the 27% share held by Google.

Alibaba doesn't seem to really believe in the search potential of Yahoo! China that it entirely owns. It actually pitched Yahoo! China site as an entertainment-oriented portal. By the way, we were wondering last week whether Yahoo! China would team up with a search partner.

Alibaba is favoring Sohu’s search service even though it has the option of adopting rival technologies like Microsoft's Bing. Indeed, even if Microsoft and Yahoo! joined forces to create a search alliance, local Yahoo! sites which aren't wholly owned by Yahoo! Inc. can choose a search partner on their own. For example, do you remember that Yahoo! Japan has recently chosen Google as search partner?