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Qihoo 360 Technology Co. Ltd. Message Board

  • bmkbusinesssolutions bmkbusinesssolutions Jul 9, 2013 11:58 AM Flag

    Huge Disconnect between BIDU and QIHU

    Can someone please explain to me how QIHU has a market cap of $10B (yes, yahoo finance is not correct, neither is google finance valuing QIHU at 12B market cap) and BIDU has a market cap of $30B?

    How is this possible when QIHU does 1/10th the sales of BIDU and QIHU has worse margins. This is my understanding... that BIDU will remain the dominant player as QIHU is taking market share of search from the smaller rivals, not BIDU. So essentially, BIDU users have difficulty converting to QIHU search, as QIHU is known for picking up newbie internet users (people in China literally going online for the first times in their lives) When these users are more familiar with the internet, they tend to use a superior search, such as BIDU. Therefore, QIHU is running out of room for market share.

    There's also the pressing issue against BIDU that QIHU is having a solid footing in mobile search. But everyone knows monetization issues with mobile... just ask GOOG or FB or LNKD. So I don't see how there will be a meaningful impact of gaining traction in a segment that's overly difficult to monetize, at least not enough of an impact to justify the runup.

    So is BIDU undervalued or is QIHU overvalued?

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