Tencent Holdings, one of the largest Chinese Internet companies, yesterday bought a stake in sogou.com, the search engine which until now was a fully owned subsidiary of Sohu Inc (NASDAQ:SOHU). Tencent, according to the official statement, has invested $ 448 million in Sogou and has merged the search business and assets of its own soso search engine with the business of sogou.com. Tencent will now hold a 36.5% stake in Sogou. However Sohu and its affiliate companies will continue to hold a controlling stake in the Sogou search engine and Sogou will continue to operate independently as a Sohu subsidiary under its current management.
According to Charles Zhang, CEO at Sohu.com, the partnership with Tencent will expand Sogou’s market share, market presence and significantly elevate its position in the highly competitive Chinese online PC search market, and even more so in the rapidly evolving Chinese mobile search market. The combined search service, according to the CEO, will be the second largest search engine in the Chinese internet search space just behind market leader Baidu (NASDAQ:BIDU). The stock price of Sohu had seen a sharp increase of over 7.5% in the last trading session before seeing a .09% dip in after-hours trade, following the announcement of the new agreement.
To see stock price movement, check Sohu stock chart.
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