Zhou 祎 talking about his Qihoo and the industry's ups and downs.

Beijing has just had a rain pass. Qihoo 360(Qihu. NYSE Chairman Zhou (Weibo) wears a black polo shirt and sits idly in his office talking about his Qihoo and the industry's ups and downs. There are no tables, in addition to the two 1.8 meters high giant stereo, is a room of CDs and records, but the owner of the house has not had time to open this set of expensive audio, this year he was busy doing 360 special machine, have the time to challenge under Lei (Micro bo).

Stereo opposite only a transparent tea table and a group of sofas, the second floor of the coffee table is placed a millet cell phone (micro-bo) carton, Zhou said, the millet phone is his own to buy, to see how the Millet mobile phone. The coffee table is placed on a very long time QQ Penguin, printed on the "OICQ", this is Qihoo 360 on the first anniversary of the listing friend sent him.

In late July, Foreign Financial Network (blog, micro-Bo) station Seek-ingalpha published an article questioned the Qihoo 360 transport games too high ARPU value, this is Qihoo 360 in the listing after the nineth time questioned. In early July, anonymousanalytics (anonymous analysis) questioned Qihoo 360 's flow is not true in the Chinese concept stocks, only Qihoo 360 has such "treatment".

Although the logic of the 360 "traffic fraud" is not perfect, which has never been installed in comscore, the Seekingalpha's query has been garters on the "I Stock" website, but this has made Qihoo 360 's profit model and development prospects look more and more like fog.

Faced with all sorts of questions, Zhou's attempt to explain Qihoo 360 and his own past and future is not mysterious or simple.

Complex story

Qihoo has been questioned nine times about the complexity of the story the company told US investors. Before the IPO, Zhou told American agencies that "the next necessary bigthing of the Internet is security, apart from news, search, and E-commerce."

At that time, he described to investors the "security software" value, in the face of many investors can not give Qihoo 360 valuation of the issue, Zhou advice is: refer to Tencent QQ. Of course, Tencent is a platform, Zhou also gave the concept: Qihoo's three major platforms, including group buying, games and desktop applications app platform.

But the main income of Qihoo's financial statements comes from "advertising" in the minds of American investors, the advertising company is Yahoo, and the amount of revenue will vary according to the number of clicks.

But Qihoo is not the "ad" of the simple Yahoo model. Qihoo mainly rely on free anti-virus software to occupy the user's computer, and then through the 360 security browser-driven Web site to change the current QI Tiger CFO Xu Zuori in February 2012, the analyst conference call has revealed that about 50% of the browser users will directly use 360 Web site navigation as the home page. and Qihoo to which site to bring traffic from the site to get promotion fees.

360 Security URL navigation price is paid by location, not simply according to the flow of settlement, such as the location of a link each quarter how much money, but if the traffic to the site to go up quickly, then the next quarter of the link will increase prices.

In addition, the introduction of the game to the user is another more and more important way to make money.

Zhou's own summary is that Qihoo actually two sources of income, are based on the browser. One is the browser's navigation and search traffic, and then another is the browser recommended Web game. The revenue of the open platform is finally due to both models, because it is also for partners to deliver traffic.

Soaring performance

No wonder the firm is eyeing Qihoo 360, and the company's performance has soared. In 2012, Q1 360 earned $69.276 million trillion in revenue, reaching 41.27% of total income in 2011.

Most of these gains come from web site prices.

360 The price of the navigation page has been rising since last year, the important location links from 700,000 to 1 million, Baidu's navigation web site (good 123) is higher, the price of about 1 million, and every quarter will adjust, in the last year prices rose the most fierce, almost rose 50%, Mainly because E-commerce sites to get users to bidding each other.

360 Web site with Baidu hao123 conversion rate is comparable, but Baidu navigation flow is bigger, so the price is higher. E-commerce Web site when money tight, some can not afford to buy Baidu's hao123, priority to buy Qihoo 360 of the site navigation, and give up other small navigation site.

Qihoo's 360 web site navigation and Baidu's hao123 Web site navigation are the beneficiaries of the rising e-commerce bubble of the 2011. Most of the electronic business site is currently in the "burning money" phase. This money to the site and search engines, competing for user resources of vicious competition led to the cost of these e-commerce companies constantly soaring.

Qihoo 360 of the "one Zone" (the top of the name station navigation area) in 2010 years about 100,000 yuan a link, at the beginning of 2011, some rose to close to 1 million yuan, in the year most of the change to the bidding mode. Baidu Hao123 has long been a bidding mode, so some industry name station navigation link a price even sold to 2 million to 3 million yuan.

It is this year, 360 of the Web site by virtue of security software and browser-driven quickly from other small web site to kill, the Gap and Baidu acquisition of hao123 narrowing, the entire site's share of the navigation site has gradually concentrated on Baidu and Qihoo two. December 2011, there have been "auto" unable to withstand the price of the website site to inform users: since January 2012 no longer buy the site location of navigation sites. But now "Auto" also appears in the Tiger Navigation page important position.

Yes, in the past two or three years, quarterly price increases in the URL station to bring a cost of IP, has been from one or two points up to the top of a few cents a click.

But on the other hand, Qihoo 360 handed in a pretty good earnings report.

The "mission" of the special machine

Prices cannot rise indefinitely, and the location of navigation pages is limited.

But Zhou thinks it's too early to talk about the Qihoo's ceiling. Because Qihoo has done three things: Personalized home page, that is, the browser according to different people's browsing habits give different recommendations, all see is no longer the same page; vertical entry, including electricity quotient, video, etc., vertical can let the user no longer like before, Click on a link to leave the navigation page, the user will stay on the navigation page more and more longer; third, the Qihoo will be based on browser collection of user browsing habits, users browse a page when the next to recommend other pages.

has seen the number of PC Internet users on the ceiling of the Zhou, the most worried about the wireless internet to the Internet subversion, Qihoo 360 or any company may not be able to replicate the PC era in mobile phone glory.

Yes, Qihoo 3,601 business model is based on 360 security, if anti-virus software can not effectively enter the smartphone, then can not drive the browser, can not drive the Web site navigation station, the mobile Internet in the field of all business models are virtual talk. The reality is that Apple and Microsoft's operating systems are too closed, and Qihoo 360 and any security firm can hardly penetrate, and only Android is the only way out.

Zhou, of course, does not fully agree with that, saying the view is too narrow.

Many mobile internet operators believe that the real purpose of Qihoo 360 is to "prevent people from entering." As with manufacturers, 360 of security software can get the highest right to control the mobile phone, so you can uninstall other companies ' products. Without the root of security software is not to do this, less to do a lot of things.

Zhou this view. He said that the 360 special machines in the 360 client product users can be free to uninstall, otherwise users will be frustrated. Now he cares about only two things, one is the user's feelings, as long as the contrary to this article, in Qihoo 360 inside the company can not pass, the other is foreign novelty companies and models. And 360 of the most important job now is to open, not to prevent other applications, otherwise users will not agree.

According to a study published at the end of July in the first half of 2012, the Chinese mobile phone security market was 180 million active users, depending on the active user, 360 accounted for about 70% of the market and the user was over 120 million.

Weeks of insecurity

In the outside world, Zhou is a tough man, dare to fight with anyone, but Zhou said he never felt safe, but he thought that this is the driving force for entrepreneurship. And after the implementation of the open strategy, he has a little more security, which is not related to the listing or not, but in the industry after the opening of more friends.

Zhou never worried about how Qihoo 360 earns money, because 360 already has more than 400 million users, and Qihoo 360 can try to put these users in a variety of ways.

Zhou 祎 is really worried about the wireless internet market. Because when people use wireless internet, behavior will change, the Internet location and time will change, frequency will change. At this point the business model on many PCs may not necessarily exist.

Such fears are justified. The CEO Wangxi has said that big companies in wireless internet are not so easy to replicate their advantages on the PC Internet, because the wireless internet users are too complex, the market will be segmented very thin. This is why it is appropriate to search the phone to keep the second largest search engine location.

Zhou admits he is concerned about a disruption of the wireless internet to the entire wired internet. Zhou thought Tencent was the only company that got a ticket because of the micro-letter.

In fact, even now claiming to have 400 million users, Zhou is still "insecure" and his sense of security will not come from "billions of users", but to see whether Qihoo can have a killer application in the wireless internet, and has a very strong user base. He believes that 360 security guards with micro-faith than "or the shortcomings of the interactive". As a security software, its interaction with the user is limited, not as high as the micro-letter.

In Zhou's words, he felt more "secure" after the opening. He sees the open platform as a "philosophy". That is to say, the Qihoo has the entrance, has the user, has the flow, wants to divide it out. Tencent is sold out, Odd tiger is in addition to do those most basic things, other things are basically with others cooperation.

In fact, the spread of Qihoo 360 will certainly launch a search, whether this means that Qihoo 360 of the next battle will be Baidu?

In response, Zhou did not respond positively, he just said: "is being considered." "Qihoo 360 makes a search with a certain advantage 360 security browsers have more than 100 million users.

Dialog

Economic Observer: Anonymousanalyt-ics (anonymous analysis) One important reason to suspect that Qihoo 360 's traffic data is not true is that Qihoo 360 quietly took the plug-in of the company comscore, the US third party independent monitoring network traffic data, Why does the Qihoo win comscore, is the traffic data really "disappointing"?

Zhou (Weibo): First of all, ComScore Plug-ins have been Kaspersky, BitDefender, small red umbrella, NOD32 mistakenly reported that these software users in China level millions of; second, ComScore's plug-ins have been cleaned up by 360 themselves as useless plug-ins for a long time. , which is why we have a lower coincidence rate. Third, the 360 Web site navigation page embedded in comscore code, has been internationally renowned for the soft NOD32 mistakenly reported two times (false report of the object is comscore statistics JS code), This is the reason that led to comscore statistic code from 360 Web site navigation offline, the first time May 22, 2012, the second time June 18, 2012.

Economic Observer: Why Qihoo does not agree to the placement of foreign well-known web site comscore traffic monitoring Plug-ins?

Zhou: Doubts about Qihoo's flow and business model have never been broken. Chinese companies basically do not use foreign third-party agencies to monitor traffic. ComScore is a third party flow monitoring agency in the United States, through the client to understand your Internet habits, there are 100,000 or 500,000, it is a sample, can calculate what people browse every day, what the site has done. In China so many users, it is how to install a 1万来 people. But this 1万来 person may be this kind of person that does not use security software very much, this kind of person that sample comes out certainly is not allowed. So at home we use the Chinese investigation company, now the U.S. stock market is generally not believe in China, so we always have to question our traffic.

But in turn, proving that our traffic is actually very simple. Traffic fraud can cheat for a while, not fooled too long. Buy 360 Web site navigation flow is the internet savvy companies, such as when, Amazon (micro-blog), Google, Taobao. If these companies buy your traffic, feel that your traffic is not real, no conversion rate, the second month it will not buy, Taobao is still our customers.

Economic observer: Two days ago, Qihoo 360 's game Arup value was questioned fraud, the query that the industry average of about sixty or seventy yuan, how do you explain this?

Zhou: Those organizations don't understand the difference between the client game and the Web game. There are two kinds of web games, one is the social game, the other is the MMO, the strategy game or the role-playing game. Social games Some Arup values are very low, but the Arup value of the web game is very high. The Arup value of Qihoo is not the highest, only medium level. The reason why foreigners do not understand is that there is no one listed on the page tour company. In accordance with the listed client game company average Arup value to calculate the page tour industry, itself is a layman's performance.

Economic Observer: Why Qihoo 360 will be the target of short institutions, other companies do not seem to be questioned so many times, is not the Qihoo really what the problem?

Zhou: The Chinese concept stocks company has fallen badly. Chinese Internet companies are divided into two categories: a kind of old companies such as Baidu, Sina, a long history, investors are familiar with it, it is difficult to short. The second category is the new company, a lot of new companies have fallen to the issue price below, and then fell less than where to go, as if only Qihoo or a stock price in the company. Performance is OK, so they feel there is a short profit margin. In addition, our business model in the United States has not been similar. Unlike Renren, it can be seen as China's Facebook.

Maybe it's for these reasons, not that we're 360 really having a problem.

Conversely, if you look at the short reports, many people point out the fallacy, and the accusations are not being implemented. I suspect that a lot of the short reports are driven by my competitors, because those materials are likely to be offered by competitors, and they will have to attack me personally. That doesn't fit the American kind of short culture, does it?

Economic Observer: Qihoo's investment agency is concerned about outside doubt?

Zhou: The people who buy our stock, we all focus on communication. Now that we can buy our stock, they all understand us. The so-called question person, the first is does not understand, does not understand, second, now short China concept is some people's profit means.

Chinese concept stocks do have a lot of problems with the U.S. stock market. First, there are indeed many that are due to the company's dishonesty; second, the question of vie, many Western investors are insecure. So they like to take this opportunity to do something for you. But as you can see, these two years shorting has no effect on us. Qihoo 360 's investment agency has never asked these things.

Economic Observer: Industry says 360 is going to do the search, what are you going to do?

Zhou: We are the largest number of users in the browser, the browser is obviously the entrance to search, we give Baidu, Google has contributed to a huge search traffic. Google is paying us money, but because of the well-known reasons, Google's service is not stable, we are very worried. Many people also mistakenly think that our browser is not good, in fact, is the Google service is not stable. Baidu, it sees us as competitors.

We think we should have a very good chance of searching. But we are also thinking about what kind of search should be done. Baidu is doing exactly the same search, or the combination of browsers, so we are also exploring how to combine the browser to give users more recommendations. Build a recommendation engine or discovery engine. We're exploring, for example, how we can combine browsers to give users some security tips when they're searching. We are also considering this issue, but we do not have a particularly clear conclusion yet.

Search, to put it bluntly, is to give users find something he is interested in. There are three ways to achieve this: one is that you list all kinds of things to him, users do not search the search, direct point, is the navigation site. Second, if the browser knows what the user is looking at every day, then when the user browses some information, I can give him some matching and recommendation. This is the equivalent of not typing keywords, I'm guessing what you like, I think it is also a search. The third, most traditional search, is the user typing keywords, and then to the user search results. So these three kinds, we're still looking. At the right time, we will tell you what we think.

Economic Observer: 360 doing the search has a considerable advantage, because at first you have done Yahoo. Many people say that 360 of Yahoo's technology may be fast outdated, what do you think?

Zhou: That was more than 10 years ago, we have no Yahoo technology, Yahoo Technology has never really opened to us. At that time in Yahoo did "a search", are relying on their own strength to do, also did not apply for a patent. The search technology of ten years ago has no meaning today.

If there are any advantages to doing the search, I admit that we have a huge number of browser users. Of course, we are also thinking about how to do something innovative, this need to think clearly to do.

Economic Observer: What have you been doing most recently?

Zhou: Aren't you busy with the special machine lately? Not finished. To tell you the truth, I haven't been searching for a long time. These years have been busy, 3Q after the busy listing, the listing is busy open, and recently busy our wireless, 360 desktop, 360 browser, 360 special machine, special machine app ...

Economic Observer: is Qihoo a mobile phone to challenge millet?

Zhou: I believe that lei (micro Bo) will find that the final elimination of millet is certainly not me, I do not have this ability, it is likely to be horse general (Reporter Note: ma). He also said, do not compete with the horse always do not know the horse is always strong. I think that's a bit early. In this case, I hope that the homogeneous open platform to bring a lot of mobile phone manufacturers to the market, in the future there will be more players in the market, for all of us may be appropriately more balanced.

Economic Observer: What about the development plan of Qihoo?

Zhou: At present, from the 360 business pattern, from the user requirements, first of all, I think "security" is a big demand, so whether on the PC or on the phone, I continue to do the security to do a good job.

The second, I think the browser is not only the entrance to the Internet, I think the future it will be a new Internet operating system, in the PC browser, we have to maintain the share of the PC domain value, mobile phone field we are exploring.

Third, I think it's the market, we have the biggest share in the PC app market, like the software housekeeper, and now we're building the biggest app market on Android handsets through our phone assistants. Apple I think there is no chance, because Apple's entire industry chain has been monopolized by it. But Android is more open, and we have a chance.

The fourth thing I think is very important is cloud services. So we're building our cloud storage service, which is providing services like Apple I-cloud. We are mainly doing two things: first, to our various applications to provide cloud storage support, many of our applications need to put a lot of things in the cloud, these are to provide users with free service, is the enhancement of our functions. Second, we also provide users similar to the Drawbox services, that is, synchronous network disk services, is to provide users with a backup, is the storage of various pictures, documents place, this may be a free service plus value-added charging mode.

These are the areas where I think there is a huge demand for users.

In the future, more of our income will come from a split income, because our large amount of income is in cooperation with others.

We do not do the idea of empire, we as long as in this industry, the second echelon, the third Echelon can live very well, not to be killed by Tencent, we feel very happy.