Sogou closes in on buyer

Sogou, the online search subsidiary of Sohu, is likely to announce its buyer this week or next, with China's second largest search engine, Qihoo 360, as the most likely candidate, according to media reports published over the weekend.

An unnamed person close to Sogou's senior executives said that an acquisition is "definitely happening" and the company will formally announce the buyer in mid-July, the Legal Mirror reported Friday.

Other than Qihoo 360, possible candidates include China's largest search engine Baidu and Internet giant Tencent Holdings.

Baidu commanded 67.21 percent of the search engine market share this April, while Qihoo 360 had 14.94 percent and Sogou 9.15 percent, according to the report.

Qihoo 360 declined to comment when contacted by the Global Times Sunday, and Sohu could not be reached.

Ji Chendong, an analyst at Frost & Sullivan, told the Global Times Sunday that it would create a win-win situation if Qihoo 360 is the buyer.

"The two companies will command 25 to 30 percent of the market after the buyout, and the commercial value of the combined search engine will jump by 40 to 60 percent," Ji said. "Qihoo 360 wants Sogou's technology, talent and experience, and Sogou wants some of Qihoo 360's shares to ensure it has the right to speak under its new management."

Sohu is likely to sell Sogou because it wants cash to enhance its online video streaming business, which holds less market share than youku.com and v.qq.com, he added.

"Whoever the buyer is, the search engine market will be reshuffled," he said. "If Sohu ends up with Qihoo 360, the combined product will greatly challenge the dominant position that Baidu holds."