Baidu competitor says to focus on AI as it plans US IPO
01/08/2017 07:26
By Sijia Jiang
HONG KONG, Aug 1 (Reuters) - China's second-largest mobile
search engine Sogou, controlled by Sohu.com SOHU.O and 45
percent owned by Tencent Holdings 0700.HK , said it will focus
on artificial intelligence (AI) as it aims to build a
next-generation search engine.
Chinese internet and gaming company Sohu on Monday announced
the plan to float Sogou in the United States "as early as market
conditions permit", saying the search unit would make a
confidential registration filing to the US Securities and
Exchange Commission.
Sogou is the second-largest mobile search engine in China
after Baidu BIDU.O . Tencent is the largest shareholder in
Sogou, though the stake carries less voting power than Sohu's 39
percent stake.
Sohu on Monday reported a 10 percent revenue rise to $461
million in the second quarter, including $211 million from
Sogou, which rose at a faster pace of 20 percent rise
year-on-year.
Sogou CEO Wang Xiaochuan said in an internal email after the
announcement on Monday that Sogou would leverage its strength in
natural language processing, which he called the "crown jewel"
of artificial intelligence, and move from search to
question-answering.
The aim was to become an "innovator and pioneer in
artificial intelligence in China," he said in the email, the
content of which was confirmed by Sogou.
Wang also said Sogou would increase investment into AI, big
data and the so-called internet of things.
Sogou declined to comment on the possible size of the IPO.
Wang told Bloomberg in an interview in January that Sogou was
targeting a valuation of $5 billion.
Sogou merged with Tencent's search business Soso in 2013
upon Tencent's strategic investment. Sohu management said in an
earnings call on Monday that content-sharing with Tencent's
social media app WeChat contributed to Sogou's search traffic
growth, which jumped 50 percent in mobile in the past quarter.
WeChat, China's most popular social media app with nearly 1
billion monthly active users, in April established a small
search department of its own, which analysts said could grow
into a powerful threat to other Chinese search companies such as
Sogou and Baidu.
Sogou declined to comment on collaboration details with
Tencent.
Sohu's Nasdaq-listed shares jumped 12 percent on Monday to a
19-month high.
(Reporting by Sijia Jiang; Editing by Stephen Coates)
((Sijia.Jiang@thomsonreuters.com; +852 65313893;))
Keywords: SOGOU IPO/