Tencents wholly-owned acquisition of Sogou at $9 a share

 Tencents wholly-owned acquisition of Sogou at $9 a share

As of press release, Sogou shares have risen nearly 30%. Before the transaction, Tencent was Sogous single largest shareholder, holding 38.71%, more than Sohus 33.44%. Tencent did not respond to 36 kryptons request for comment.

Sogou, whose main business is search engine, browser and input method, was born out of Sohu company in 2004. It is mainly engaged in search business of Sohu company. It was founded by Wang Xiaochuan, former senior vice president and CTO of Sohu.

However, on July 2, 2012, Sohu announced that it had bought back about 10% of Alibabas shares in Sogou. Sogou broke up with ALI.

In September 2013, Tencent injected $448 million into Sogou, and merged its Tencent search business and other related assets into Sogou. After the transaction, Tencent immediately acquired 36.5% of Sogous diluted shares. At the same time, both sides announced that Sogou will continue to operate independently as a subsidiary of Sohu. Zhang Chaoyang will continue to serve as the chairman of the board, Liu Chiping, CEO of Tencent and Ren Yuxin, COO of Tencent, will serve as directors and CEO to lead the development of the whole company.

After obtaining Tencents investment, strategic cooperation at the business level of both sides has also been launched.

In June 2014, Sogou search announced that it was officially accessing WeChat official account. Users can browse the WeChat official account and all articles related to the query on Sogou search results page, which is a major source of traffic for Sogou search.

On November 9, 2017, Sogou was listed on the New York Stock Exchange at a price of $13. The first daily trading day closed at $13.5, up 3.85%, with a market value of $5.29 billion. Sohu, Sogous second largest shareholder, had a market value of only $2.15 billion.

In May 2020, Sogou released the first quarter of 2020 without audit financial report. Data show that Sogous revenue in the first quarter was 1.79 billion yuan (RMB, the same below), a year-on-year increase of 5%, higher than the consensus forecast of pembo (251 million US dollars).

According to the financial report, in the first quarter, search and search related revenue was 1.658 billion yuan (US $238 million), a year-on-year increase of 1%. Auction based pay per click service continued to grow year-on-year, accounting for 91.0% of search and search related revenue, compared with 87.2% in the same period of 2019; other revenue was 138 million yuan (US $20 million), up 6% year-on-year, mainly due to the increase in sales revenue of intelligent hardware products Plus. In addition, the dau of Sogou input method in this quarter was 482 million, a year-on-year increase of 9%, and the peak of daily average voice requests reached 1.4 billion.

As of press release, the market value of Sogou is $2.235 billion, while Sohu is only $436 million.