Trade Resources Industry Views Tencent Will See Stake in Sogou.Com, Rise to About 40 Percent in The Near Future

Tencent Will See Stake in Sogou.Com, Rise to About 40 Percent in The Near Future

Chinese Internet giant Tencent Holdings Ltd. (SEHK: 0700) will see stake in, the search engine unit of Inc. (NASDAQ: SOHU), rise to about 40 percent in the near future.

Tencent to Control 40% of

It co-announced with and in the afternoon on September 16 that it invested USD 448 million in In addition, it injected its search engine subsidiary and related assets into the latter and after the deal, it would control a 36.5 percent stake in the unit. And the figure would rise to about 40 percent in the near future.

Charles Zhang, chairman of the board and CEO of, disclosed in an interview that it had been in talks with the Hong Kong-listed firm for a long period of time and during the period, it negotiated with other firms, too. It reached an agreement with the latter over independent growth of recently and this directly caused them to sign the aforesaid agreement.

Sources said previously that Chinese online security and privacy protection service provider Qihoo 360 Technology (NASDAQ: QIHU) planned to put into pocket with a high price. However, it failed to reach an agreement with team of the latter because it always wanted to spin off and then merger the latter into it.

Pony Ma, chairman of the board of Tencent, said that the cooperative structure among it, and was perfect. On the one hand, the initiative of founding team of was taken into consideration. And on the other hand, the cooperation would urge platform resources of both it and to be well released. And upon completion of the deal, the brand would disappear.

Actually, it has become a focal point how both sides will consolidate the search engine business. According to a contract inked by them, Sohu will still serve as the controlling shareholder of after the investment by Tencent and as a subsidiary of will run independently. And in the newborn, Charles will continue acting as the chairman, with Liu Chiping and Ren Yuxin, president and COO of Tencent each acting as a director.

Pony reiterated that the merger did not mean that it failed to enter the domestic search engine market. Its search engine unit saw share in the domestic PC market be small in the past and this had a close tie with its poor ability in channels. And for instance, it did not well in the field of browsers. It made some progresses, but had lost the best time window.

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Tencent to Control 40% of