At the crossroads of Charles Zhang and Sohu

Who are you going to sell the dog to? This is a very worthwhile question for Sohu's chairman and Chief Executive Officer Charles Zhang.

By now, he and Sohu Group are already at a crossroads. At the end of May, he himself did not deny the economic observer, and did not deny that the dog is looking for suitable "strategic" investors, but also do not deny that Sohu video business is seeking acquisitions. According to him, Sohu Video is now looking for two directions, One Direction is "organic growth", rely on good content and marketing brand, the other direction is strategic growth, that is, mergers and acquisitions-now these two are "in progress."

At present, from the exposure of senior investors in Sohu News is, from the perspective of Zhang Chaoyang hope to be able to sell Sogou Baidu, but Sogou company CEO Wang Xiaoquan but hope to rely on Qi Tiger 360. However, people who are closer to Wang Xiaoquan reveal that Wang Xiaoquan actually prefers Tencent.

Although on May 13, on the "360 has signed a preliminary agreement with Sogou" This matter, economic observer reporter once sent text messages to Zhou 祎 verification, although Zhou 祎 reply to: Do not believe, rumor rumors. However, recently, a person close to the whole incident revealed that Zhou's determination to take the Sogou, the highest bid, and "should be wholly-owned, not strategic investment", but currently Baidu and Tencent are not out.

Now, Zhang is choosing between two absolutely "hostile" buyers, and in some industry insiders ' eyes, Zhang has seemed to have to make a choice in order to achieve the goal of "Sohu's market capitalisation of tens of billions of dollars".

In Zhang's eyes, Sohu's most exciting time is far from coming, in recent years after every earnings release, he will denounce the Wall Street does not understand Sohu, do not understand him, because he has the Sogou, Sohu Video, Sohu Portal, Sohu News client and the vertical field of the industry's website Sohu car, Sohu focus on real estate and so many trump card , once a home, according to the same company's market value of the breakthrough of 5 billion U.S. dollars, 10 billion dollars is not a problem. The person said.

2010, Sohu has made four business strategy: From media video, search, games and web2.0 four aspects of "rebuilding Sohu", but today, web2.0 field has Sina and Tencent two big giants, this is no longer the main direction of Sohu.

The "Ace" that was played

Everything is still in the process of negotiations, Zhang Chaoyang faced the two sides of the price is rising.

Although Sogou has had the opportunity to challenge Baidu in search, although Sogou has the so-called "three rockets" and has been profitable, but because Wang Xiaoquan chose the flow mode, only in the keyword search price than Baidu cheaper than 20%, and did not form a revolutionary subversion-- This strategy has in some way led to the end of the day that Sogou is destined to be sold.

In fact, if not Qihoo 360 in the search market halfway to kill and share in the short term beyond the sogou, in the face of the competitive pressure of Baidu, perhaps Sogou Usher will not be "listed for sale", but the Nasdaq bell.

Two events, doomed to the end of the Sogou. And these two kill Sogou "enemy opponent", it is at present to Sogou bid two companies. However, the industry rumors, Wang Xiaoquan more favorite Tencent, as early this year, Wang Xiaoquan and Tencent CEO Ma met. After that, MA gave Wang Xiaoquan a text message saying: "You don't learn ' week actor '." "The implication is that I do not want Wang Xiaoquan to use this hype."

The reality is that Wang Xiaoquan's consideration is one thing, for the future of Sohu Group, Charles Zhang has more plans. For the continued downturn in share prices, the share price fell to more than 30 U.S. dollars in the Sohu group, although Sogou's performance has climbed, the last quarter Sogou's revenue reached 39 million U.S. dollars, but how to put this part of the assets in the market value is indeed a difficult problem.

For any one area, investors only recognize the market first, do not recognize the market second, third-place companies. If not quickly, wait until the odd Tiger 360 Rob some share, the value of Sogou will be further decline.

And now it's the odd Tiger 360, which is growing fast in search shares, Zhou 祎 was enough to make Charles Zhang a key historical figure in rewriting the search pattern; On the other side, it was Baidu, a man who would pay him a high price and give Sohu video enough to disdain the Youku potato group in the video field.

In any case, Charles Zhang is determined to maximize the value of Sohu-to this end, he needs to Sohu's assets through the dispatch of the game: Sogou, Sohu Video, Sohu Portal, Sohu News client and the vertical field of Sohu car, Sohu focus on real estate. In this, Sogou is a trump card that can be played.

Psychological warfare

A person familiar with the matter said the search for Zhang, is not not love, but too technical, Zhang Zhang is difficult to "a pole tube to the end", but the video is not, Charles Zhang likes to mix Entertainment circle, network video future alternative TV trend is more and more obvious, compared to Charles Zhang more like video, he can more pro-Pro.

In the video, two years ago Sohu set out to strive to become the network High-definition video the most important platform for the goal, and set the HD and long video for the main direction. Charles Zhang smashed 200 million yuan to buy copyright, and through the legal level of efforts to clean up the entire video industry piracy habits, since then the video industry companies have begun to compete in the legitimate fair environment.

Zhang told the Economic Observer that his interest in art, music and dance was almost innate, and that Sohu's video positioning, indeed, in the serious news of Sohu Portal has a strong entertainment tendency.

And according to close to the Zhang people revealed that compared to the "technology Empire", Zhang is more interested in his "entertainment media empire": One has included Sohu Entertainment, Sohu Portal, Sohu Advantage vertical channel (car, focus real estate), including media platform, as well as through the self-made to buy, to play the entire industry chain video broadcast platform. Entertainment Media Group.

After the comeback, Zhang has repeatedly said that "China's film and television entertainment industry is on the eve of the outbreak," and Sohu Group in May, the new building was named "Sohu Media building." Zhang's attack on the media industry trump card includes Sohu video, Sohu Portal and Sohu News client, which is clearly his own interest.

Sohu Group still has more than 65% of Sogou's equity--Charles Zhang has absolute control. Wonder had news out Sogou sold to Qihoo 360, Wang Xiaoquan to join Alibaba, attracted Wang Xiaoquan out of the rumor. And the whole process, Zhang is the external statement, Sohu must produce based on text, pictures, video and other best content, must have channels, that is, Sogou, "Sogou is very important, Sogou is the entrance and channel." ”

Grabs means obvious, and his reasons are very good, the data show, in the PC end Sogou Input Method user coverage of up to 416 million, coverage rate of up to 87.81%, Sogou browser, Web site navigation users are also more than 100 million; on the mobile end, As of April 15, 2013 Sogou Mobile input Month active user number has reached 127 million, also occupy an absolute advantage, and in addition to input method, Sogou map mobile end app user number of more than 42 million, Sogou number of installed capacity has reached tens, with 50 million effective data, but also to achieve online users and offline merchants dynamic connection.

Now this time, Qihoo 360 and Baidu battle is tide surging, Sogou's assets if not now, value can not be released.

Sogou grabs another reason, for Baidu and Qihoo 360来 said, Sogou's value does not depend on the Sogou, and depending on each other, no matter who got the Sogou, the other side may be the value of the day fell: when the market share of less than 25% of Google announced the exit of China, Baidu market value two months rose 13 billion U.S. dollars !

For Qihoo 360来 said, if the combined Sogou, the two add up the market share will reach 25%, comparable to the previous Google China's share, which will obviously have a strong impact on Baidu.

360 as a search for "recruits", its channel Alliance, the core technology has been missing, such as keyword matching technology advertising sales system is very imperfect, if the dog can be successfully pulled into the camp, will be 360 search in the advertising market to bring more initiative. And both sides in the browser, navigation page of the resultant force advantage, will further change the current search market pattern.

This is probably why Charles Zhang chose Sogou to break the key reasons.

Secret weapon

How much value does a loss pplive have for Sohu? It seems the answer is "worthless".

"At present, Sohu and PPLive have not reached any agreement, if there are important news will be announced in the earnings." "Zhang Chaoyang in Sohu Video" sprint good voice "so respond.

It was rumored that PPLive would soon be acquired by Sohu Video, and the price was also spread at 500 million-600 million dollars. But the result of the economic observer's confirmation to the authoritative source is that this may be some of the interests of the smoke to confuse, the real situation is that there is no such quotation, because pplive internal operations and financial problems are not clear, which led to Sohu video transactions with the cooling--PPTV will replace the copyright income also counted as revenue, This makes Sohu unacceptable.

One reason Charles Zhang did not buy PPLive was that he had a secret weapon-"wildfire video" client.

According to the person said, Sohu internal focus on mobile short video of the Entrepreneurial project "Wildfire video" just got 80 million yuan of venture capital, the market all the way bullish. In addition to this there are users to break 100 million of the Sohu news client.

"The strategy for Sohu video includes endogenous growth and strategic mix, the latter being mergers and acquisitions." "One of the company's insiders said Zhang Zhang layout sohu video already in many hands preparation, including four initiatives, pplive alternatives have been selected thunder and popular, at the same time in the industrial chain on the downstream layout, has selected a large number of private TV series production companies, film distribution companies, cinema line as a buyer , and cooperation with excellent programs such as the good voice of China.

This means that, regardless of the last Baidu or 360 to take the dog, Charles Zhang can be used to activate the search flow on the support, but also can get rich funds to support its acquisition and Sohu video of the American drama, animation, comprehensive arts, self-made four direction of investment.

In fact, the current market rumors, "Sogou married" scheme is rumored to have two versions, without exception for the Activate video to prepare. In the first version, Sogou married 360, Sohu Group held about 20% of the 360 shareholding to become a holding party, and then cash acquisition and restructuring pplive to lay the leading position of video industry. In another version, Baidu to cash, Archie Art stake to marry Sogou, Sohu accordingly become Archie Art shareholder, plus just be love odd art acquired PPS, Sohu Group to sit in the video industry boss position. However, the strategic planning of video is the basis of Charles Zhang's "entertainment media empire", but far from all.

Sohu Group's business matrix The current planning is quite clear: from the listed tour to provide a strong cash flow protection, Sogou become its internet and mobile end of the "entrance" and "channel", and "Central Kitchen" is Sohu's video, news, focus on real estate, cars and other core content.

At present, Zhang in the mobile Internet strategic layout, including Sohu News client and Sogou input method, the two products have already owned billion users.

And once Sohu can sit on the video of the boss position, Sohu market value Breakthrough 5 billion U.S. dollars, 10 billion U.S. dollars is not impossible.