Client feast: The business logic behind Qihoo 360

China operating newspaper reporter Dong Jun Beijing report

The prospectus for Qihoo 360 (Qihoo, 360) picks up some data that could incite US investors: China's 3rd-largest internet company, 2nd-largest browser provider, 1th-largest internet/mobile security company, more than 80% per cent penetration, and more than 300 million active users a month.

And what will the data look like in the future? That is the Zhou left to investors the imagination of space. From Asia to the United States, Zhou's listing is not a lot of rhetoric, because Qihoo's business in the United States has no reference, in China there is no role model to shape.

"Zhou himself is a practical entrepreneur, not like a preacher." "One of Qihoo's employees evaluates his own boss," he says. "He thinks the business model is not coming out, take a step and try to do it constantly." ”

With 360 series of security software to obtain a large number of users, browser flow and Web site navigation as the main revenue, this is obviously not the final business model Qihoo. From entrepreneurship to listing, the business logic of Qihoo evolves in one ring.

　First ring sticky User: In the name of security

In his early 3721, he used some small tools to make Zhou a notorious "father of Chinese rogue software". Holding the idea of "washing white", Zhou resisted the board's objections and insisted on 360 security guards. 2006, a variety of malicious software to wreak havoc on the internet, and then the security vendors are unified to the category of anti-virus. Facing the competition with antivirus software is not the best means, Zhou

Through a variety of public opinion means, the user of the virus and Trojan demand made a distinction, abruptly from antivirus software manufacturers to rob a piece of the market. The evasive, strengthen the user's latent demand, the artificial localization a new market, does not have the conflict with the antivirus software manufacturer head-on, but smoothly ranks in the safe market. The 360 security guards became the vanguard of the Qihoo into the security market, and the next 360 families grew larger.

360 and QQ, are free clients, the difference is that QQ has a strong user stickiness, and 360 is only a security tool software, users can easily discard. Qihoo need to do is to find the user to use the Internet in all aspects of security needs, and the corresponding scheme to meet users: the Internet has a "safe browser", online shopping "network to buy bodyguards", play games have "360 safe" and so on.

In the road show, Zhou to Qihoo's positioning is "the Internet can be trusted platform." To secure the reputation of security software as the core, the recommendation of security software and applications, the user to carry out a three-dimensional, all-round protection, which is sticking to the key to customer membership. "360 is in the name of security ' occupy ' your computer, including all Internet-related application portals. "An industry analyst said, a product replacement is very easy, if it is a package of solutions, users will not easily change."

"Zhou like to emphasize user perception, we need to tell users what 360 have done." "Qihoo insiders have told reporters that in order to increase stickiness, 360 will not quietly" sleep "in the user's computer," boot Small assistant "," computer physical examination "such small functions, without affecting the user to use the computer premise, will strengthen the user's perception, so that users feel 360 of the existence, increase interaction with users. This is Qihoo further strengthens the brand, enhances the stickiness the practice, after obtains the user then obtains the brand cognition degree.

This is the first ring of the business of Qihoo, which sticks to a large number of users with free security application core.

　　Second loop flow: Chinese-style business

What is the real entrance to the Internet? browsers, Search, IM (instant messaging software) are all, and now have one more portal competitor-client software. From the success of Tencent to the listing of Qihoo, began a feast for clients.

Take the CA "free" everywhere to send people, Zhou was once a free mode of missionaries. It's hard to understand how a free security software can "make money" when he's preaching to the people. From the founding of 3721, the internet in China to fight 13, Zhou to China's special Internet environment, the use of Chinese netizens understand thoroughly, whether it is products, channels, or China's unique internet business.

Security browser become the Internet access of netizens, mass users can be changed the flow: 360 Browser Home page has a search box, embedded Google search, Qihoo can be divided into the search engine; on the home page there is also a 360 security site, where the advertising position is an important source of 360 revenue.

Qihoo's prospectus shows that in 2010, Qihoo's revenue from online advertising was $38.826 million trillion, accounting for 67.3% of total revenue, which came from the cash flow.

The successful listing of Qihoo, on the one hand, validates the value of Internet entry, on the other hand, it also promotes the value of China's unique navigation websites. In 2004, Baidu to 50 million yuan acquisition of "HAO123", 2007 Google to "tens of millions of" acquisition of "265 navigation", and currently rely mainly on navigation for the income of the Qihoo market has more than 3 billion U.S. dollars. February 2011, Taobao will be its "Amoy Web site" Navigation station to have 2345 navigation of Shanghai Rui Chong operations, but soon resumed, it is also aware of the navigation site higher value of the realisation.

In the one months before the Qihoo listing, 360 security desktop products began trial operation. This is an iphone-like user interface on top of the operating system that allows users to install and use popular Internet software, applications, and services. This is another move by Qihoo to compete for the PC portal. The industry more to evaluate the desktop as a "more advanced navigation or traffic transit station", but Qihoo more think that this is a PC and Internet resources of the Organization, is the long tail theory of practice.

This is the second ring of the Qihoo business, with browsers and desktop app stores as a bridge, mastering all Internet portals for users. And the flow of liquidity to solve the problem of free profit model.

Third Ring Open Platform:

Looking for the next big THING.

Simple flow is not the ideal business model of Qihoo, because based on the number of users of 300 million or more netizens, Tencent, Baidu has created a bigger business. Qihoo Hope: Change this income structure during the year.

In the process of listing the Zhou, the company focused on 360 of the web game's joint operations, saying that the revenue growth rate would be higher than the advertising revenue generated by the site navigation. 360 The current joint operation of the web game has more than 20, is expected to be increased by the end of 2011 to 100, and not long ago they specifically launched a game browser products.

Shortly before the listing, Qihoo also released a 360-group purchase platform, through the audit will meet the qualification of Group buying website access platform, and get group buying navigation, user flow Import, anti-theft number, such as fishing services, users just register a 360 account, you can open a station through the service of the purchase site shopping website. Like Taobao is the c2c, a big store, 360 group buying platform is a big shopping mall. A lot of business models can be derived here.

April 7, 360 speed Browser application open platform officially released. Before and after the listing, Qihoo constantly released open platform products, is to prove to investors, open platform is the real business of the future of Qihoo.

Zhou in the heart of a can with Tencent, Baidu, Taobao compared to the "big THING", Qihoo has a similar number of users, but the current more than 50 million U.S. dollars in annual income, more than 3 billion U.S. dollar market capitalisation is far away from them. Tencent, Baidu, Taobao model is not possible to replicate successfully, Zhou must find the fourth very cow application, can be turned over in front of these three mountain. "Open platform is the business logic of Qihoo, but also the logic of competition." "Qihoo insiders told reporters that although the specific business model of the open platform has not been clearly designed, but this is the direction of Qihoo." While doing to see, constantly adjust, Zhou with his best at the micro-innovation to slowly grope.

"The 360 that really impress investors is the ability to become a platform-level company in the future cloud computing era," he said. "Easy Capital senior investment manager Zhang Peng Cheng is an evaluation." And Eric Analysis thinks that at present, the profit model of Qihoo 360 only opens a small link in the industrial chain, and the 360 strategic layout will transform the whole Internet desktop management from security to users, build the ecosystem of user's PC application service, and will cover the network entrance, Network security to software management and the resulting entertainment, shopping and other multiple services. Taking into account the enormous growth potential of China's Internet, Eric Consulting predicts that Qihoo 360 will be warmly sought after in the capital markets.

This is the third ring of Qihoo, set up an open platform to form a shared business model, which can become the next "big THING".

Source: China Business Report