Back in August 2010, China’s Alibaba Group – the web company behind China’s biggest e-commerce sites – invested US$15 million in the search engine Sogou.com, a subsidiary of the web portal Sohu (NASDAQ:SOHU), taking a 10 percent stake in it. But now that looks set to be reversed, as a US SEC filing by Sohu reveals that it has completed a share buy-back.
Alibaba has agreed to the deal, and the new repurchase price is set at $25,800,000. Some of that goes to the investment group Yunfeng Capital, which made the initial injection of funds together with Alibaba.
NASDAQ has just reopened for the week, and is not reacting well to this brand-new filing (see it here). So far, in one hour of Monday morning trading, $SOHU is down about three percent.
Sogou is now China’s second-largest search engine, having surpassed Google late last year, with a reported 7.67 percent market share (that’s using stats from web analytics company CNZZ). It generates advertising revenue for parent company Sohu, which sees 36.6 percent of its total income coming from ads.
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