Once completed, the proposed transaction will make Sogou a private indirect wholly-owned subsidiary of Tencent, and Sogous American depository receipts will be delisted from the New York Stock Exchange.
After the news came out, Sogous share price soared by 46%, and its market value increased by 1 billion US dollars (equivalent to 7 billion yuan). As of the time of publication, the value of Sogou US stock market exceeded 3.2 billion US dollars, much higher than the market value of its parent company Sohu.
As of the latest data, Tencent holds nearly 40% of Sogous shares, with Sohu holding 33.8%, Zhang Chaoyang holding 6.4% and Sogous boss Wang Xiaochuan holding 5.5%.
Sogou responds to Tencents offer:
Will seriously discuss and measure the relevant issues
Sogou announced today that the companys board of directors has received a preliminary non binding proposal letter from Tencent, which proposes to purchase all of Sogous issued common shares, including Sogous issued general shares representing ads, at $9 per common share or ads. If the proposed transaction can be successfully completed, Sogou will become an indirect wholly-owned subsidiary of Tencent, and Sogou ads will be delisted from the New York Stock Exchange and become a private holding company.
In this regard, Sogous response: Thank Tencent for its recognition of Sogous value, technical ability and product innovation ability. Next, we will seriously discuss and measure the relevant issues, so that Sogou can continue to create greater value for users.
Tencent and Sogou
Sogou was founded by Wang Xiaochuan, former senior vice president and CTO of Sohu.
On August 3, 2004, Sohu company officially launched the third generation of Chinese search engine Sogou, but Zhang Chaoyangs purpose is very simple, is to enhance the search skills of Sohu.
On June 5, 2006, Sogou input method was born, which is the first application of advanced search engine technology in the field of Internet. After a wave of market promotion, by 2008, Sogous input method has occupied 40% of the market share. As of 2017, Sogou input method app has 230 million active users per month, ranking first in the field of input method. It is also a killer product that Sogou can attract many users in the market.
Wang Xiaochuan was very anxious. He decided to go to Hangzhou alone to meet Ma Yun.
In October 2010, Sohu announced the separation of Sogou. Alibaba, as a strategic investor, and Yunfeng fund as a financial investor, jointly invested in Sogou. Compared with Sogous valuation of $138 million in 2008, Sogous valuation in the above transactions was $237 million, an increase of more than 70%. Wang Xiaochuan became Sogous CEO and helped Sogou complete its first transformation.
In 2012, Sohu bought back Sogou shares in Alibabas hands. This is a peaceful breakup. To some extent, it is like Sogous rite of passage. Alibaba has helped Sogou grow from a weak toddler to a young man who can resist risks alone.
In 2013, Zhang Chaoyang has basically lost confidence in search and is ready to sell it. On the market, Baidu and 360 are flocking to make a generous offer. Zhou Hongyi of 360, in particular, seems to be committed to Sogou and frequently contacts Zhang Chaoyang. And Zhang Chaoyang is also basically satisfied with Zhou Hongyis cooperation in fighting against Baidu. If 360 wins Sogou, its market share should reach 35% - 40%, which is enough to pose a huge threat to Baidu. At this time, Tencent got a foot in.
On September 16, 2013, Tencent invested $448 million in Sogou, and incorporated its search and QQ input methods into Sogous existing business. Tencent will hold 36.5% of the new Sogou shares. At the same time, it was announced that new Sogou will continue to operate independently as a subsidiary of Sohu. Zhang Chaoyang will continue to be the chairman of the board, Wang Xiaochuan will continue to lead the development of the whole company as a director and CEO, while Liu Zhiping, President of Tencent, and Ren Yuxin, coo, will serve as directors.
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. Extended reading gem registration system the first stock: and these new shares to be issued half a year shrink 200 billion! The worlds largest hedge fund layoffs dozens of employees, meituan takeout and hungry helmet battle: what does it mean behind the fierce modeling? Source: China fund daily Author: Taylor, editor in charge: Zhong Qiming_ NF5619
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.