China's Search Engines, Soso and Sogou Merge In $448 Million Deal

[engine]

Baidu, China's version of Google, is set to face more intense competition with the merger of its third and fourth largest rivals.

Internet giant Tencent has announced its Soso search-related business will combine with Sohu's Sogou, according to a press release on Monday.

This was part of a deal which saw Tencent invest US$448 million in cash in Sogou, giving it a 36.5 percent stake, which could further increase to about 40 percent in future.China's Search Engines, Soso and Sogou Merge In $448 Million Deal [zdnet.com]

[bill]

That clears up the earlier speculation [webmasterworld.com] of who would end up with Sogou's ~9% marketshare slice. Soso is a tiny property compared to the others, so their combined share still leaves them far behind Baidu and Qihoo...but that appears to have been TenCent's plan.

[engine]

I wonder if we're likely to see a continued strengthening of Baidu and a marginalisation of the smaller players.

[bill]

Actually the smaller players have been growing, particularly Qihoo. It's Baidu's market-share that is being eroded...slightly. The smaller competitors in the China market are quite feisty and tenacious.