Qihoo 360 search engine to challenge Baidu

While the Chinese Web browser company Qihoo 360 Technology Co aims to challenge the country's biggest search engine by introducing its own search services, it is unlikely to change the field of competition, at least in the short term, analysts said.

Qihoo has decided to make the search engine it released last week its default search engine on all of its browsers, a service that used to be provided by Google. That step has been seen as being tantamount to a declaration of war against current search providers.

"It will take time for Qihoo to gain a significant market share and build up its sales channels to compete against Baidu," said Wallace Cheung, an Internet analyst at Credit Suisse, in a research note.

"We don't expect Qihoo search services to have an immediate effect on Baidu's revenues, at least not in 2012," he said.

Baidu declined to comment on the issue, and Qihoo was also reluctant to predict its market share.

In the second quarter of 2012, Baidu commanded 78.6 percent of the online search market in China, as measured by sales, said the domestic research company Analysys International. Google, for its part, has a 15.7 percent share. It's unclear how much search traffic has gone to Qihoo.

Hong Bo, a Chinese IT critic who follows the industry, said Qihoo's entry into the market may not greatly affect the current competition among the biggest players.

"Qihoo's brand is not very well-known among search engines," he said. "The people who use it are mainly the same ones who use its Web browsers, and others are not likely to pick Qihoo as their first choice for search services."

"The best-case scenario for Qihoo would be that its 20 percent market share in the browser sector would boost search traffic, but the amount would still be too small," said Hong.

Qihoo's decision, however, poses a threat to Sogou, a Chinese-language search engine developed by the Web portal Sohu.com Inc, which has a similar profit model, Hong said. Even so, the danger will probably be small, as Chinese Internet users are likely to stick with the search engines they are most accustomed to.

In addition, analysts believed that Google will see its traffic decline as Qihoo ceases using the world's most-popular search engine on its browser.

"The effect has been small because it is the top advertising provider of content related to international trade," said Hong, adding that Google's 15-percent market share helped the company cement a position in the nation's search market.

"Qihoo's traffic will surge in the short term with its larger stable of browser users," Hong said. "But it still needs to see how far it can go."