Tencents 3.5 billion acquisition of Sogou giant search war?

category:Finance
 Tencents 3.5 billion acquisition of Sogou giant search war?


Tencent sent out the invitation in midsummer. On the evening of July 27, Sogou announced that the companys board of directors had received a preliminary non binding proposal letter from Tencent. At that time, Sogou CEO Wang Xiaochuan also forwarded the message for the first time, saying, next, we will discuss and measure the relevant issues..

Search opportunities

In the current search war, the competition between zitiao and Baidu is becoming more and more intense. The former not only excavates Baidus many search generals, but also tries to launch search ads, which directly points to Baidus revenue hinterland.

In this context, Tencent and Sogou signed a privatization agreement, which also gave the search war new variables.

Back in 2013, Tencent packaged the non core business of search into Sogou, and invested $448 million to invest in Sogou, holding 36.5% of the shares.

Tencent is more open-minded than before. Many of our businesses dont need to be 100% owned by ourselves. We can build them through cooperation and joint ventures. Tencent CEO Ma Huateng said when announcing the capital injection of Sogou.

Now Tencent has spent another $3.5 billion on Sogou, and the biggest trigger point is the huge opportunity in the field of search engine.

More importantly, once spent a lot of effort did not do a good search, this time Tencent may reverse the wind.

Users who use wechat search for a long time will find that if the previous search content was more limited in Tencent ecology, now the search results are more and more rich, and the granularity is getting smaller and smaller.

In addition, referring to the application of search in word hopping information and short video products, Tencent PCG department also needs a search system to serve users. The divisions products include news, long video, short video, etc.

However, the final ownership of Sogou search, whether it is an independent development or as the underlying technology of major business units, remains to be further news from both sides.

Mediate between giants

Today, baidu still occupies the majority of the search market share. However, although the share of Sogou is small, it has been wandering between big men and giants.

In 2003, Wang Xiaochuan, the then senior technical manager of Sohu, set up Sohu R & D center and began to develop search engine. In August 2004, Sohu launched the third generation of interactive Chinese search engine Sogou search. In 2010, Google pulled out of China, and Baidu has no two in the Chinese market.

In 2013, a similar scene was staged again. 360 still wanted to buy Sogou, but Wang Xiaochuan was still reluctant. But this time, Wang Xiaochuan pulled Tencent to save the soldiers.

In September, in Sohu media building, Ma Huateng, Zhang Chaoyang and wangxiaochuan sat together to receive media interviews, announcing Tencent strategy to join Sogou, becoming Sogous largest single shareholder.

In November 2017, Sogou went to the U.S. for listing. According to the prospectus, Sogou provides default general search engines for Tencents various products, such as mobile QQ browser, Tencent website, QQ navigation and Internet navigation. According to Sogous annual report, about 35% of Sogous total search traffic, measured by page views, comes from Tencent users.

Now, Sogou is holding hands with Tencent again, which seems to be a natural result. On the other hand, Tencent has changed its strategy from publicly saying that it is not necessary to fully own the search business to wholly-owned acquisition.

Recovery of core business

The article Tencent has no dream once put Tencent at the target of public opinion, pointing out that Tencent started to release mananshan after taking the first-class ship ticket of wechat and holding the cash printing machine of games in hand. Due to insufficient product innovation, Tencent completely relies on flow and capital to paddle. However, as far as the investment business of Tencent is concerned, its investment in the subject matter is more financial investment, and it is not fully controlling. It is a big shareholder. This federalism is praised by people, which is also the origin of Tencent Buddhism.

However, the missing short video traffic highland, in the content of this core radius and word jump fighting is also visible to the naked eye. The competition in the business world has always been cruel. The giants body is still hot when he falls down. Tencent Ma Huateng has more than once said to the outside world, sometimes can not understand what young people like, feel like walking on thin ice.

There are some popular services like live broadcasting. Tencent once spent more than $1 billion in one day to invest in two head players of the game, namely, fighting fish and tiger teeth, to bring the war to an end. After successive capital actions, Tencent became the major shareholder of both. But thats not enough.

Because there are variables in the industry, word jumping is also being broadcast live, and at the same time, the game is being attacked. The fast Kwai has not yet been accepted as the largest live broadcasting platform, so there is news that Tencent has promoted the merger of fighting fish and tiger teeth. Maybe only by integrating music industry resources like TME and becoming the first, Tencent can put its heart in its stomach.

There are also businesses that have caused great controversy. Tencent has been in the online world through reading text, but the emergence of rice reading novels, red fruit novels, etc., has been growing rapidly and grabbing a large number of users. What makes people anxious is that the paid reading mode has been adopted for reading articles, and the latter is free. It is uncertain whether overtaking in a corner will happen.

After some consideration, Tencent decided to change the team, and Cheng Wu, vice president of Tencent group and CEO of Tencent pictures, replaced Wu Wenhui and Liang Xiaodong, CO CEOs of yuewenyuan. Tencent wants to explore a new model, but many authors who are good at the payment model do not accept it. The two sides have launched a long tug of war, and the storm is constant, so far it has not been completely resolved. However, Tencent is determined to take back the online business and explore a new model. It believes that the adjustment of reading is consistent with the companys strategy, we should obtain customers through the mode of free subscription and member subscription, so as to bring more added value to digital content. Tencent will not pull any core business back. In addition, Tencent is also developing other possibilities, such as buying Iqiyi, adding more investment to Kwai Fu, or even buying. In addition, Tencent is also constantly launching new businesses, including but not limited to Tencent smart retail, APP live e-commerce, wechat stores, geese shopping, travel services, etc. After a lot of trial and error, Tencent may be able to separate the business that it did not do well as it did at the beginning. However, it is absolutely impossible for the Buddhism department to exist in the future. Source: interface news editor: Wang Wenhua_ NF5982

After some consideration, Tencent decided to change the team, and Cheng Wu, vice president of Tencent group and CEO of Tencent pictures, replaced Wu Wenhui and Liang Xiaodong, CO CEOs of yuewenyuan. Tencent wants to explore a new model, but many authors who are good at the payment model do not accept it. The two sides have launched a long tug of war, and the storm is constant, so far it has not been completely resolved. However, Tencent is determined to take back the online business and explore a new model. It believes that the adjustment of reading is consistent with the companys strategy, we should obtain customers through the mode of free subscription and member subscription, so as to bring more added value to digital content.

After a lot of trial and error, Tencent may be able to separate the business that it did not do well as it did at the beginning. However, it is absolutely impossible for the Buddhism department to exist in the future.