It’s not just Baidu, China’s top search engine company, that’s looking to developing nations for new market opportunities with hundreds of millions of first-time netizens. Now Qihoo (NYSE:QIHU), China’s second biggest search engine, is doing the same thing.
The new battleground is software. It’s a battle taking place in countries like Brazil, Indonesia, and Thailand, where the number of web users will double from 2010 to 2015. Baidu (NASDAQ:BIDU) started this a couple of years ago when it began pushing its antivirus software in Southeast Asia – it was treading a path beaten by smaller and more adventurous Chinese companies like UCWeb, maker of the popular mobile browser app. Now Qihoo is doing the same with its own software offerings.
Kevin Tellier, business development manager of Qihoo’s relatively new global team, says the company is looking to areas like Southeast Asia and Brazil with four of its Android, iOS, and Windows apps. Three of them are related to antivirus, while the other is the 360 Browser app for PCs. They’re marketed under the 360 Safe brand on an English-language homepage.
360 Browser has already surpassed Internet Explorer in China, and now Qihoo wants to try replicate that elsewhere. The 360 Browser app sells itself on security, and comes with a built-in file download scanner in addition to more conventional safeguards such as anti-phishing tools. However, since many developing nations are going straight to mobile (with cheap Android smartphones) and bypassing PCs, it’s a surprising omission that the company’s 360 Browser for Android app remains limited to the Chinese market.
Focus on security apps
Tellier says Qihoo wants to be known “first and foremost for security services” in its new markets, pitting it against names such as Avast and Norton.
That could extend to Qihoo’s new hardware, which is currently limited to consumers in China. At the Mobile Asia Expo in Shanghai this week, Qihoo is showing off its little gadgets to international visitors to gauge their reactions. There’s a wi-fi dongle, an Android “smart key” that’s a clone of Pressy, and a wearable gizmo for children (pictured below) that allows parents to monitor where their kids are at.
The company has no comment on whether its web empire – which in China covers 360 Search, 360 Answers, an AOL-style web directory, and online advertising – will also venture abroad. Clearly it’s a lot harder to adapt and localize web services than it is a suite of apps. Arch-rival Baidu seems close to launching its search engine in Thailand, Brazil, and Egypt – markets where it has already been active for years with a mix of software offerings and web products such as a simple web links directory.
Whatever the extent of Qihoo’s overseas ventures, the company looks set to clash with Baidu on a number of new fronts.
But without any web products operating outside of China, Qihoo’s monetization options are limited with its free software. In China, its web browser and antivirus apps are part of a huge ecosystem that prints money out of ad clicks, referrals, and driving search engine traffic – a lot like Google. Outside of China, that’s not yet possible for Qihoo. “Our priority is in users,” adds Tellier. “Monetization [in new markets] is a question to be answered later.”