Bottom line: Sogou is likely to list in the second half of the year, but will get a lukewarm reception from investors due to its status as a solid second-tier player without hopes of ever becoming a sector leader.
Sogou eyes H2 IPO
Some 3 months into the New Year, we’re still waiting for the first New York IPO by a Chinese Internet company after a blockbuster year in 2014. Now we’re getting word of a listing that could come in the second half, with news that portal stalwart Sohu (Nasdaq: SOHU) is planning an IPO for its decade-old Sougou search engine in that time frame.
The offering looks very so-so, as Sougou has failed to gain much traction despite its status as one of China’s oldest search players. More broadly speaking, we can probably expect to see more of this kind of ho-hum IPO from second-tier Chinese Internet firms for the rest of the year, since the most exciting players listed during last year’s surge in new offerings. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 21-23. To view a full article or story, click on the link next to the headline.
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Bacardi Challenges Baijiu With Tea-Based “Tang” Liquor Developed For China (Chinese article)
Yidao Welcomes Cooperation With Uber, Sees No Need For Merger (Chinese article)
Sohu’s (Nasdaq: SOHU) Sougou Eyes US IPO In 2nd Half 2015, Sees Value At $3 Bln (Chinese article)
Reuters (Toronto: TR) Websites Blocked In China (English article)
Bottom line: Sohu’s latest results hint at lingering weakness in online games and Internet advertising, while online video also continues to suffer amid a regulatory crackdown.
Sohu looks weak in games, advertising
The latest results from diversified web portal Sohu (Nasdaq: SOHU) are quite a mixed bag, with its lackluster search business finally showing some promising signs of accelerating growth, even as its core advertising and online gaming businesses sputter. Then there’s its money-losing online video business, which is facing a growing number of hurdles due to a regulatory crackdown, just as the unit looks set to make a minor acquisition that probably won’t add very much to its future prospects. Read Full Post…
Online search leader Baidu (Nasdaq: BIDU) has just become the first of China’s “big 3” Internet companies to release third quarter results, showing it’s not in any danger of losing its overwhelming share of China’s search advertising revenue anytime soon. Many media like to focus on the fact that Baidu has seen its dominance in China’s search market fall sharply over the last year, as newer rivals backed by Qihoo 360 (NYSE: QIHU) and Sohu (Nasdaq: SOHU) have collectively grown to take nearly half of the market by traffic volume. But while Baidu’s share of traffic may be sinking, it still holds the lion’s share of money that advertisers pay to search engines in China. Read Full Post…
Rising online search star Qihoo 360 (NYSE: QIHU) has reached a major milestone, winning 30 percent of China’s traffic for the first time just 2 years after the launch of its So.com search engine. Despite that huge achievement, Qihoo’s newly released quarterly results show it’s having a harder time monetizing its search business, which may partly explain why its shares are down 20 percent since a peak in the spring. From the perspective of an observer, these latest signs still look quite encouraging and might even prompt a Qihoo skeptic like myself to consider buying the company’s stock at its current price. Read Full Post…
Internet titan Tencent (HKEx: 700) is wasting little time in its search for synergies with its growing stable of strategic partners, with word of a new tie-up between its popular WeChat instant messaging service and its search partner Sohu (Nasdaq: SOHU). The new partnership will see WeChat provide exclusive access to its huge volumes of user-generated content for indexing by Sohu’s Sogou search engine. The alliance comes just 9 months after Tencent and Sohu announced an equity tie-up that saw the 2 companies combine their search businesses to form China’s third largest player. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 10. To view a full article or story, click on the link next to the headline.
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Legend Holdings Profit Up 20 Pct In 2013, Becomes Limited Stock Company (Chinese article)
China Mobile (HKEx: 941) Takes 18 Pct Stake In Thai Carrier True Corp (HKEx announcement)
Fast rising search operators Qihoo 360 (NYSE: QIHU) and Sogou may be challenging sector heavyweight Baidu (Nasdaq: BIDU) in terms of market share, but they’re having far more difficulty finding an audience among advertisers that are the sector’s main revenue source. That’s my main conclusion after seeing the latest data for all 3 companies, which show Qihoo and Sogou making steady gains in terms of search traffic but failing to translate those gains into meaningful revenue. Read Full Post…
Xunlei and 55tuan have emerged as 2 of the biggest orphans in the rapidly consolidating online video and group buying spaces, respectively, putting pressure on both to find partners to boost their chances for long-term survival. The pair were in separate headlines this week in their search for new tie-ups, with Xunlei selling a major stake of itself to software maker Kingsoft (HKEx: 3888) and 55tuan reportedly in talks to sell some or all of itself to security software maker Qihoo 360 (NYSE: QIHU). Read Full Post…
Just a half year after pooling their online search assets, leading web firm Tencent (HKEx: 700) and the much smaller Sohu (Nasdaq: SOHU) are reportedly in talks to also merge their video businesses amid a broader wave of consolidation sweeping China’s Internet. I have some doubts about whether this new deal will happen for reasons I’ll explain shortly, though I’m far less skeptical now than I would have been at this time a year ago. If such a deal does happen, it could mark the latest step in what could become Tencent’s eventual acquisition of Sohu, one of China’s oldest Internet companies. Read Full Post…
Search leader Baidu (Nasdaq: BIDU) may be rapidly yielding market share to 2 up-and-coming rivals, even as its latest results show it’s still king of the hill when it comes to getting revenue from online advertisers. But the company is still searching for new innovation, with word that charismatic Xiaomi co-founder Lei Jun came to speak at an internal event this week as Baidu seeks to rekindle its own “wolf spirit”. Baidu’s quest to become more diversified and has moved into high gear with a spree of major acquisitions over the last year in a wide range of areas. Still, its latest results, while impressive, show just how heavily dependent the company remains on online advertisers. Read Full Post…
