Qihoo raised $550 mil this past week and publicly denied it was to buy Sogou from Sohu. The same day basically the CEO of Qihoo was publicly praising Autonavi (AMAP) for making their premium map app free. Baidu is getting aggressively into maps but Autonavi is way better bc they have been doing it for 10 years. The CEO of Qihoo is on the board of directors of Autonavi (AMAP) and knows the company well. If Qihoo wants to be the leader in search they need a top map product and they are way too far behind to play catch up. In other words, they need Autonavi bad. Maybe the $550 mil is to invest in Autonavi (AMAP)? Qihoo's search engine already uses Autonavi. Why wouldn't Quihoo want to own a big piece of the map platform they offer users? Especially when their top search competitor Baidu is ahead of Qihoo in maps and that's a big disadvantage. If Qihoo invests in AMAP they get to turn the table on Baidu and own a piece of by far the best mapping company China.
3 months ago Alibaba invested $294 mil into Autonavi for a 28.3% stake. Autonavi and Alibaba are working together to create a maps based ecommerce ecosystem. Millions of Taobao and Tmall storefronts are going to be in Autonavi maps. Qihoo CEO is a serial entrepreneur and I bet he wants in on this action
Something big is up is my guess but only time will tell what the $550 mil is for
First of all QIHU never denied being in talks with SOHU on buying Sogou. They actually said that they had not reached the offer point of the negociations yet. I believe an offer is coming. QIHU is all about search and gaining marketshare especially in competing with BIDU. They know that the share price is tied to search marketshare...
Sentiment: Strong Buy
Alibaba invested $294 mil into AMAP for a 28.3% stake. AMAP is the 'Google Maps of China'. Together AMAP and Alibaba are creating a maps based virtual world ecommerce ecosystem. A huge % of Taobao seller stores are going to go live in AMAP maps soon I believe. Qihoo CEO is on the board of directors at AMAP. He raised the now $600 mil the same day basically that AMAP and Baidu made their $8 and $5 premium maps products free and same day QIHU CEO publicly praised AMAP in Chinese media. I still think there is a really good chance QIHU is using that money to buy AMAP shares but only time will tell. Qihoo search engine and browsers all need maps. What search service doesn't? They already basically rent AMAP maps so why not own a big piece of them? I really think QIHU needs to own a big piece of AMAP just to be a well rounded search engine and to have some control and influence at AMAP. QIHU CEO is a series entrepreneur. He prob gets what Alibaba and AMAP are doing is a game changer. Online to offline maps based virtual world ecommerce ecosystems is the next big area of Internet development I believe and AMAP is leading the way. Interact with businesses and service providers in your proximity - in AMAP maps.
Say what you want...Qihoo outsources all their mapping to Autonavi and mapping is a central part of all modern day search engines. It's a big hole in Qihoo's game that is easily plugged if they buy big piece of AMAP. QIHOO would go from having zero map game to being much better than Baidu