A Sogou ad on a bus in Zhengzhou. (Photo/CFP)
Sogou, an internet search engine run by web portal Sohu.com, is seeking buyers, sparking interest from domestic internet giants Baidu, Tencent and Qihoo 360, the Chinese-language National Business Daily reports, citing market insiders.
Sources said that Qihoo 360 had offered to purchase Sogou through a stock swap worth US$1.4 billion and that the talks had entered the final stages. Baidu, China's largest internet search engine, and the country's largest internet company Tencent were also reportedly among the bidders.
Charles Zhang, chairman and CEO of Sohu, said he wanted to buy a large-scale online video streaming site to help boost the content of Sohu and to seek a strategic investor for Sogou at the same time.
Analysts said Sohu had offered to sell a 30% stake in Sogou in a bid to infuse capital into its loss-making Sohu TV platform, a video streaming site similar to YouTube.
The business daily reported that if the Sogou-360 deal went through, Qihoo 360, a newcomer to the internet search business, could attract a bigger advertising market. The deal would also potentially change the internet search landscape in China, given the two highly complementary user bases.
But a source close to Sohu told the daily that Zhang is unlikely to give up on Sogou and that the move is aimed at raising the public profile of the search engine and help ramp up its stock price.
Baidu had reportedly courted Sogou with a higher price, as well as made Sohu a major shareholder in its online video streaming service iQiyi.com, which had recently acquired another online video service, PPS.
Tencent, one of the other reported contenders for Sogou, is running its own search engine called Soso. The 2 billion yuan (US$326 million) it has invested in Soso has yet to bear fruit, however. The search engine has a small market share, making the courtship of Sogou by Tencent a probable move, analysts said.