According to an article published today in the Wall Street Journal:
"Tencent Holdings Limited,invested $448 million for a minority share in Chinese search engine Sogou, the latest example of how China's largest Internet companies are spending sizable amounts to expand their product arsenals.The deal marks the end of months of talks between Sohu.com Inc and potential suitors for its Sogou search unit.
Tencent's investment, which gives it a 36.5% stake in Sogou, is also in part designed to keep rivals such as Baidu Inc. and Qiho360 Technology Co. from getting their hands on China's third-largest search engine by traffic, according to research firm CNZZ.
"Tencent Holdings Limited,invested $448 million for a minority share in Chinese search engine Sogou, the latest example of how China's largest Internet companies are spending sizable amounts to expand their product arsenals.The deal marks the end of months of talks between Sohu.com Inc and potential suitors for its Sogou search unit.
Tencent's investment, which gives it a 36.5% stake in Sogou, is also in part designed to keep rivals such as Baidu Inc. and Qiho360 Technology Co. from getting their hands on China's third-largest search engine by traffic, according to research firm CNZZ.
At the same time, it allows Sohu to retain control over Sogou while also getting a new source of traffic for its search engine from Tencent's popular QQ and WeChat messaging services. "What Sogou needs is not cash, it's traffic, access…I think this will do it," Sohu Chairman Charles Zhang said Monday.
China's largest Internet companies are rushing to acquire or invest in any companies that can give them a competitive edge in attracting China's growing number of smartphone users. Battle lines are being drawn among China's three largest Internet companies: social-media and games provider Tencent, e-commerce company Alibaba Group Holding Ltd. and search giant Baidu, respectively. The latest move firmly aligns Sohu with Tencent".
