Baidu-Qihoo War Reflects Longstanding Feud Between Zhou Hongyi and Robin Li

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Bravery or hubris? Search is Zhou Hongyi's white whale.

Qihoo 360’s Zhou Hongyi and Baidu’s Robin Li are currently battling it out over the China search market. But this isn’t an isolated incident. In fact, the two CEOs have a history of enmity that goes back nearly a decade, which TechWeb has helpfully detailed in this worthwhile article.

The trouble began in 2002, when Zhou Hongyi’s 3721 URL conversion service came to blows with a rising Baidu. Zhou’s service allowed users to type Chinese into the URL bar and access sites directly, cutting Baidu’s search out of the picture. Zhou was making a solid profit off of the endeavour, too, but eventually Baidu took his company to court. 3721 lost. Chinese media reported that after the decision, the two men nearly came to fisticuffs on the courthouse steps.

In 2003, Zhou sold 3721 to Yahoo for $120 million and became Yahoo’s China regional director, a move he has later suggested he regrets (he feels the price should have been higher). At Yahoo, Zhou tried to unify 3721’s URL service with Yahoo’s search power to create a real competitor for Baidu, but he was ultimately unable to pull it off.

In August of 2005, Baidu listed on the NASDAQ. That same month, Zhou left Yahoo. But he didn’t give up his dream of beating Baidu with a search product, and founded Qihoo as a social search company. Early attempts at creating a popular social search engine failed, though, and Qihoo shifted its focus to security software.

Qihoo wouldn’t announce another serious search product until this summer. But in promotional materials, the company stated that 360 Search has been in development for seven years. Zhou, it seems, has not lost his obsession with search — or his obsession with beating Robin Li.

Of course, the announcement that Qihoo has been working on search since 2005 would seem to make Zhou a liar, as he stated publicly in 2010 that the company wasn’t working on search, saying that it was a ten year old idea, that Qihoo “didn’t need to do it” and that “Baidu and Tencent cannot be copied.” Now, he’s singing a different tune; one about breaking Baidu’s strong hold on China’s search market (of which it controls nearly 80 percent).

So Zhou and Li are facing off again just as they did nearly a decade ago. But this fight may not be a fair one; Baidu is a much more valuable — and powerful — company. So much so, in fact, that when Qihoo search launched, it did so incorporating a number of Baidu products, including its MP3 search, news search, maps service, and more. Analysts have suggested that Baidu is responding to 360 Search not so much because it is concerned by the competition as because it isn’t sure what the unpredictable Zhou might have up his sleeve.

Whatever Zhou has planned, it’s going to be important. Insiders suggest he has been spoiling for a fight with Baidu for years, and the move into search is also a natural progression and evolution for Qihoo’s products, especially the 360 Browser. But massive internet companies have tried to get into search and fallen flat on their faces before. Just ask Netease and Sina. Qihoo’s success is not assured. And with a leader as apparently tyrannical as Zhou Hongyi behind the helm, it’s not clear whether his attack on one of China’s biggest internet companies is brave innovation or foolish hubris.

[via TechWeb, Image source]

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