Bottom line: Sogou is unlikely to shed its position as a second-tier search engine anytime soon, despite its ties to Tencent ties, and its stock is also unlikely to be a strong performer over the next 2-3 years.
Sogou pops on debut, but will it hold?
After writing about up-and-coming hot new names like Qudian (NYSE: QD) and ZhongAn Insurance (HKEx: 6060) making blockbuster IPOs over these last few weeks, it feels a bit like going back to the future by writing today about a new listing for search engine Sogou (NYSE: SOGO). The fact of the matter is that Qudian, ZhongAn and just about all of the companies listing in this current wave of IPOs didn’t even exist when Sogou was born, and many of their founders were probably still in college or perhaps younger.
Anyone out there sensing just a tiny bit of skepticism from what I’ve just written isn’t just imagining things. As a longtime China tech reporter, I remember meeting with Charles Zhang, founder of Sogou’s parent Sohu (Nasdaq: SOHU), more than a decade ago, at which time he told me about all the great things in store for his then-fledgling search engine. Fast forward to the present, when it doesn’t seem like much has changed, including Sogou’s ongoing status as a niche player in China’s massive search market. Read Full Post…
Bottom line: A periodic window of IPOs that opens every 2-3 years is taking shape, with fintechs and other new categories like online literature likely to do well, while older concepts like e-commerce could struggle for attention.
My long-predicted IPO floodgate has finally burst, with no less than four major offerings in the headlines as we go into the new week. The new offerings I’m referring to involve two in the US, one for fintech startup Ppdai and another that has been talked about forever for Sogou, the search engine backed by Internet superstar Tencent(HKEx: 700) and the less steller Sohu(Nasdaq: SOHU).
Meantime, one of the other IPOs also involves Tencent, with its China Reading online literature unit getting cleared by the Hong Kong stock exchange and set to file its prospectus. Last but not least is Bona Film, the formerly New York-listed company that has been cleared for a re-listing in China. Read Full Post…
Bottom line: Sohu’s plan to list its Sogou search unit has a 50-50 chance of happening this year, while AirMedia’s 2-year-old privatization plan is likely to close within that period.
Sohu talks IPO for Sogou — again
A couple of IPOs are in the headlines as we head into the new week, led by an often-discussed offering by perennial third-place search engine Sogou, which is co-owned by Internet titan Tencent (HKEx: 700) and second-rate portal Sohu (Nasdaq: SOHU). At the same time, another second-rate company, AirMedia (Nasdaq: AMCN), has slashed the proposed buyout price for its attempt to go private, reflecting the company’s own troubles.
Both of these stories have a bit of the “who cares?” element for long-term investors, since neither company is one that has particularly strong long-term prospects. But they do both reflect the larger realm of smaller Chinese Internet and media companies that are struggling for attention, as investors get mesmerized by giants like Tencent, Alibaba(NYSE: BABA) and JD.com(Nasdaq: JD). Read Full Post…
Bottom line: Sogou is unlikely to make an IPO this year, despite new talk of potential for such a plan from its CEO, and may ultimately never list due to its lackluster performance.
Sogou floats another IPO plan
Online search engine Sogou is testing the market yet again for a potential IPO, hoping to spin a story of opportunity to grab market share from scandal-tainted industry leader Baidu (Nasdaq: BIDU). That story may sound attractive to investors unfamiliar with this perennial number-three in China’s search market, whose main shareholders are web portal Sohu (Nasdaq: SOHU) and Internet titan Tencent (HKEx: 700).
The only problem is that Sogou’s credibility is nearly nil these days, a direct result of the equally low credibility of controlling shareholder Sohu, which seizes on any opportunity to talk up IPOs for its various units. Accordingly, I will quite definitively go on the record saying this particular IPO won’t happen this year, and possibly not ever, regardless of what anyone at Sohu or Sogou says. Read Full Post…
Bottom line: Sohu may be forced to separately sell off its portal, video, search and gaming units over the next 1-2 years, or risk seeing them gradually fall in value as the company’s losses mount.
Sohu plunges after latest results
After running for years as a solid second-tier player, Internet veteran Sohu (Nasdaq: SOHU) is finally showing signs of running out of steam, based on its latest quarterly results and word of a major new loan to the company from its cash-rich but fading Changyou (Nasdaq: CYOU) gaming unit. This kind of turn isn’t all that surprising, since status as a second-tier player should only be temporary and such companies should either aspire to top-tier positions or sell themselves to rivals to ensure their longer term survival.
But Sohu has defied such pressures, largely due to the fiercely independent nature of its founder Charles Zhang, who is both quite shrewd but also famously averse to giving control of his empire to others. These latest results show that Zhang may soon have no choice but to sell some or all of his company, or risk seeing it slowly relegated to oblivion due to pressure from better-run rivals. Read Full Post…
Bottom line: Alibaba is the biggest beneficiary of business lost by Baidu after a scandal earlier this year, with search rivals Qihoo and Sogou also likely to pick up new business.
Baidu loses digital ad crown to Alibaba
A couple of news items are showing how Baidu’s (Nasdaq: BIDU) core search business is coming under assault from several directions, in an ominous sign for the company’s main revenue source. The first item shows that Baidu has officially lost its crown as China’s top digital adverting platform to e-commerce titan Alibaba (NYSE: BABA), following a scandal earlier this year that wiped out up to a fifth of its revenue. In the other item, reports are saying that China’s other Internet titan Tencent (HKEx: 700) has boosted its stake in Sogou, one of Baidu’s main search rivals, to 45 percent. Read Full Post…
Bottom line: Baidu will suffer more damage to its revenue and profits after new actions by China’s Cyberspace Administration, creating a potential opportunity for Bing or even Yahoo in China’s lucrative search market.
Baidu’s search woes offer opportunity for Bing, Yahoo
The woes for Internet search giant Baidu (Nasdaq: BIDU) continue, with word that China’s Internet censor is ordering the already hobbled company to cleanse itself of inappropriate sites in its search results. But whereas previous crackdowns have focused on politically sensitive content, this latest crackdown focuses on sites of companies that may be engaged in fraud or making inflated or bogus claims. The entire situation looks set to make a major dent in Baidu’s growth story, and could even see the company’s revenue shrink as it finds a new equilibrium.Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 7. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Alibaba (NYSE: BABA) CEO Outlines His 2016 Expansion Strategy (English article)
Netflix (Nasdaq: NFLX) Now Live in Almost All countries, Skips China (English article)
China Huawei’s 2015 Smartphone Shipments Jump 44 Pct, Cross 100 mln (English article)
Sogou’s 2015 Revenue to Reach $600 Mln – CEO (English article)
Jin Jiang (HKEx: 2006) Reaches Initial Framework Agreement to Buy Vienna Hotels (Chinese article)
Bottom line: Microsoft’s new tie-up with Baidu could presage a major scale-back for its China-based Bing search engine, paving the way for Baidu technology to power the struggling service.
Microsoft, Baidu in new China search tie-up
An interesting new dance is taking shape between global software titan Microsoft (Nasdaq: MSFT) and leading Chinese search engine Baidu (Nasdaq: BIDU), paving the way for a potential exit of Microsoft’s Bing search engine from China after years of disappointing results. After announcing a new tie-up that will see Baidu promote Microsoft’s upcoming Windows 10 operating system in China, the pair are saying said that Baidu will now become the default search engine on the web browser associated with the newest Windows.
Microsoft will clearly benefit from the first move, which should help it to sell more legal copies of its core Windows OS in China. Baidu is the clear beneficiary from the second move, making this look somewhat like an even trade-off. But while the first move is relatively neutral to Baidu, the second will see Microsoft effectively sacrifice Bing in China. That’s because very few people use the search engine, and now that number will drop even more if Bing loses its default status on the new Windows browser. Read Full Post…
Bottom line: Resolution of Baidu‘s dispute with a one of its top clients, combined with declining profits, reflects a new reality that is seeing its pricing power erode as it faces growing competition from both search and non-search service providers.
Exec confirms Baidu settles Putian dispute
A new report is confirming that leading search engineBaidu (Nasdaq: BIDU) has quietly settled a dispute with one of its major advertisers, which shaved nearly 15 percent off the company’s stock at the time. But the dispute is clearly have some lasting damage on Baidu’s share price, reflecting the reality that new challenges from rival search engines and also from non-search services like Tencent’s (HKEx: 700) WeChat may be undercutting Baidu’s ability to command huge premiums for its advertising services.
Baidu’s misery in China’s stock Markets
Adding to Baidu’s misery is the recent plummet in China’s stock markets, which has fueled a concurrent drop in overseas-listed Chinese tech stocks like Baidu. That sell-off saw Baidu’s shares dip more than 5 percent in the last 3 trading days of last week. That fall shaved off nearly $4 billion from its market value, as its shares reapproached levels last seen during the stand-off with the Putian Healthcare Industry Chamber of Commerce that broke out in late March. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 25-27. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Apple (Nasdaq: AAPL) Wins Siri Software Patent Appeal In China (English article)
Tencent (HKEx: 700) Doubles Medium-Term Note Program To $10 Bln (HKEx announcement)
Coca-Cola (NYSE: KO) To Acquire Chinese Protein-Drink Line For $400 Mln (English article)
Xiaomi Announces New 4i Model For India, Not Available In China (Chinese article)
Baidu (Nasdaq: BIDU) Sues Sogou for Hijacking Traffic Via IME (English article)
