Sogou Denies Rumors of Sale to Qihoo 360

Rumors have been floating around for a while now that big companies like Baidu and Qihoo have been looking to acquire China’s third-place search company Sogou (which is currently a Sohu subsidiary). But earlier this week, things kicked into high gear when Chinese tech media began reporting that a deal had already been completed that would see the Sogou acquired by Qihoo. But yesterday, a Sogou spokesman told the Beijing Times that the company has not yet signed an agreement with any company.

Still, it seems clear that Sogou is at least considering an acquisition, and Baidu, Tencent, and Qihoo are really the only viable candidates (although I suppose Alibaba could be a dark horse candidate, too). Rumors earlier this year said that Qihoo had pegged Sogou’s value at $1.4 billion, which would mean that if it’s going to be acquired there is a very short list of domestic companies that have the cash to pull it off.

Which company Sogou is eventually sold to could have major ramifications for the battle over China’s search engine market. While the company controls less than 10 percent of the market (it was around 7 percent when we last checked and may be around 9 percent now, depending on whose numbers you believe), an acquisition would significantly bolster Qihoo’s search market share, which would then be approaching or even surpassing 20 percent, or it could help Baidu solidify its domination by knocking the company up to around 80 percent of the market share. But we’ll just have to wait and see to find out whether either company is actually able to close an acquisition deal.