Qihoo Acquistion Updates: Sogou Talks Confirmed, Chukong Rumors Denied

The Chinese zodiac says that this is the year of the snake, but I think it may actually be the year of the acquisition. After last week’s huge Baidu acquisition of 91 Wireless — which is apparently the biggest acquisition ever for a Chinese internet company — Qihoo 360 CFO Alex Xu has confirmed to Bloomberg that, like rumors have been suggesting, Qihoo is in talks to buy Sogou from parent company Sohu. Such an acquisition would virtually double Qihoo’s market share in China’s search market, putting the company above 20 percent by some market estimates (although Bloomberg’s numbers seem to suggest a more modest 14 percent). Still, nothing’s official yet, as talks are apparently still in the early stages.

Meanwhile, another rumored Qihoo acquisition seems less likely after Chukong CEO Chen Haozhi told the media that his company is not for sale. The mobile gaming company had been linked to Qihoo in the press as another possible acquisition target, but Chen says the reports are completely false.

Indeed, a move into gaming would be a bit outside Qihoo’s comfort zone as the company has never really been involved in game development or operation. The Sogou acquisition makes much more sense, and with Baidu having just spent $1.9 billion on 91 Wireless, it seems less likely that company will swoop in and pick up Sogou, too, especially with Sogou’s price tag also rumored to be more than $1 billion. But Qihoo could still face competition from Tencent, and Sohu reportedly hasn’t decided whether it wants to sell Sogou outright or simply seek strategic investment at this stage.

(via Bloomberg and Sina Tech)