Qihoo 360 Technology
) jumped 9.3% yesterday, driven by both positive news and rumors.
The positive news was about its recruiting John Liu, a top
) China. Liu will be joining Qihoo as Chief Business Officer to
focus on search monetization among other things. Google executive
Schmidt made a couple of visits to China last year, saying that
the country remained a key geography.
But Google's focus is on the mobile segment, where its Android
OS appears to be doing quite well. Qihoo has limited presence on
the mobile platform so far.
It's hard to say whether Liu's departure is a blow to Google,
but it's definitely a positive for Qihoo, which did not have a
search engine before 2012. Liu brings several years of experience
from Google and may therefore be able to increase the company's
business prospects in a market that is growing more competitive
by the day.
Qihoo's search engine has been extremely successful, emerging
as the strongest competitor to market leader
). It has steadily eaten away Baidu's market share in a little
over a year to take roughly 18% of the market. Today, Baidu has
been pushed back down to 63%, according to numbers published by
But that's not all there is to it. The third and fourth
) (Sogu search engine) and Tencent (Soso search engine) have
recently combined forces, increasing competition for the top two
players. Their combined market share comes to around 13%.
Therefore, Qihoo's attempt to strengthen its competitive position
and increase cash flows through the acquisition of key personnel
The other news driving up shares is related to Alibaba's
supposed investment in Qihoo. The two companies certainly aren't
strangers: they collaborated last year to create a product search
engine for online shopping. But Qihoo has now denied the
possibility of such an investment taking place, so there may be
some moderation in share prices today.
Qihoo shares carry a Zacks Rank #1 (Strong Buy), better than
Google's Zacks Rank #2 (Buy), and the other Chinese companies
Baidu and Sohu, both of which are ranked #3 (Hold).
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