Sep 21, 2010

Alibaba Buys 16% Sohu Stake

Beijing - China's web portal said it will sell 32% of its search engine Sogou to strategic investors, including Chinese e-commerce company Alibaba Group.
In a statement, Sohu said it would sell 16% to Alibaba Group and Yunfeng Fund, a venture capital fund co-founded by Alibaba Group chairman Jack Ma (pictured), and another 16% to a fund invested by Sohu chairman Charles Zhang. Financial details were not disclosed.
When the deal is completed, Sohu will retain 68% in Sogou and use the proceeds to further develop Sogou's search business.
According to data from iResearch, Sogou is the third biggest search engine in China - although its 0.8% market share is a long way from Baidu's 70% and Google's 27%.

Local analysts have suggested that the deal will help Sohu's search business and make it more competitive, as Sohu has not been able to gain significant market share since it was launched in 2004.

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