Chinese Web Giant Tencent Spends $448 Million For Stake In Rival Sohu's Search Engine
China's largest Internet company, Tencent Holdings, has spent $448 million to buy a 36.5 percent stake in Sohu.com's Sogou search engine, China's third-largest, to lift its presence in the country's fast-growing market for search and Internet services.
As part of the deal, Tencent and Sogou will jointly develop, promote and merge their products and services, while working together on search technology and data sharing, the companies said in a joint statement
Tencent's share could increase to approximately 40 percent in the near future, the companies said.
Tencent's own search engine, Soso, has a 3.15 percent market share by users. Sogou has a 10 percent share, behind Qihoo 360 Technology with 17 percent and Baidu with 66.4 percent.
"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," said Charles Zhang, chairman and CEO of Sohu.
"Sogou remains a key strategic asset of the Sohu Group, generating synergies with our other businesses and creating significant value for Sohu shareholders," Zhang added.
China is the world's largest Internet market with 591 million users.