Chinese Internet services and security software provider
) recently announced its decision to increase its stake in
Brazilian cloud-based online security company PSafe Technologia,
for $25.0 million.
PSafe is a Brazilian antivirus service provider company. PSafe is
a part of the Rio de Janiero-based firm Grupo Xango and was
co-founded by a former employee of
), Marco De Mello.
As per TechCrunch, PSafe has 20 million average monthly users and
30 million installs. Its competitors include names like
). PSafe intends to build an app, content and game store within
its product, which seems very much in line with Qihoo's business
With a goal to become the biggest name in the global security
service industry, Qihoo has begun its expansion activities in
certain less-developed countries like Brazil, India, Russia and
South Africa where it has identified growth prospects.
Qihoo 360's exact stake in PSafe was not made public. However,
with this increase it is believed to have become the largest
investor in PSafe, followed by Redpoint.
Back in 2010, Qihoo had tried to enter into an association
with PSafe by making a small investment and providing it with a
license. This would have enabled PSafe to use Qihoo's antivirus
cloud-scanning technology in Latin America. The association did
not last long since Qihoo was skeptical about PSafe's prospects.
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The current investment by Qihoo is a reflection of the growing
ambitions of Chinese Internet companies in the international
arena. They are no longer satisfied just to compete in the
domestic online business while contending with government
censorship and website blocking.
Qihoo has been growing very strongly in the recent past. The
company posted third-quarter revenues of $187.7 million,
representing an increase of 124% from $84.0 million in the
year-ago quarter and 24% from $151.7 million in the prior
quarter. The strong year-over-year growth in revenues was mainly
due to continued momentum in both online advertising and Internet
Qihoo's management seemed happy with the progress the company has
been making in search monetization and they firmly believe that
this will be one of the main catalysts driving growth, going
However, with competition becoming more intense in the near
future, we believe that Qihoo's prospects might be dampened if it
fails to expand and innovate in tandem with changing market
Currently, Qihoo has a Zacks Rank #2 (Buy). Other stocks worth
consideration in the technology sector include
Digital River Inc
) with a Zacks Rank #1 (Strong Buy), and
), both with a Zacks Rank #2.