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Qihoo 360 denies Alibaba buying a stake in it

2014-01-10 09:02 Global Times Web Editor: qindexing

Chinese Internet company Qihoo 360 Technology Co Ltd said Thursday that e-commerce giant Alibaba Group Holdings would not take a stake in the company, after market speculation of the deal had pushed Qihoo 360's share price up by nearly 10 percent on Wednesday.

"The speculation was completely untrue," Qihoo 360 told the Global Times Thursday afternoon, after several news reports cited unnamed sources of the Beijing-based company early Thursday morning saying that Alibaba was in talks with Qihoo 360 about purchasing a stake.

The share price of NYSE-listed Qihoo 360 surged by 9.34 percent to $89 a share on market speculation, when trading closed Wednesday New York time.

Qihoo 360, which specializes in security software development and operates China's second-largest search engine by users, had a market capitalization of $10.93 billion when trading ended on Wednesday New York time.

An unnamed senior executive of Qihoo 360 said that the company had been "preparing for a major capital cooperation" with an unspecified company, news portal sina.com.cn reported Thursday.

However, Qihoo 360 told the Global Times that the company was not considering any capital cooperation with any companies right now, and does not have such plans for the near future.

Another item of market speculation that came out Thursday morning was that Internet service giant Tencent Holdings, Alibaba Group's direct rival, is considering buying a stake of online marketplace Jingdong Mall.

Tencent and Jingdong could not be reached for comment as of press time.

Many Internet service and e-commerce titans, including Alibaba and Tencent, acquired or bought stakes in smaller companies in 2013.

Alibaba formed a strategic alliance with AutoNavi Holdings, a provider of digital map and navigation service in China, last May. Tencent bought a stake for $448 million in Sohu.com Inc's Sogou search unit last September.

Zhang Yi, CEO of Shenzhen-based iiMedia Consultation Group, told the Global Times Thursday that the Internet market has been going through an important reshuffle, which would determine the current giants' performances in the next decade.

"As the traditional PC Internet market matures, the profit and growth potential lies in the mobile Internet market," Zhang said. "Big companies are buying stakes into smaller ones as a way to expand their presence in the mobile Internet market."

Alibaba bought Umeng, a Chinese mobile app analytics and developer services platform, last April.

Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, told the Global Times Thursday that China's major Internet companies have their own areas of expertise in the PC-based Internet market, but are still trying to develop their customer base in the mobile arena.

"Baidu's search engine is strong on both PCs and mobile devices, and Tencent's WeChat and QQ instant messaging services hold dominant competitive positions," Lu said. "But Alibaba is still trying to figure out its strengths in the mobile Internet market."

Alibaba operates one of China's largest online marketplaces, taobao.com, which also has a smartphone and tablet app. However, the company's mobile device apps are faced with stiff competition from other e-commerce companies such as Jingdong Mall's app, Lu said.

Both Lu and Zhang said the big companies will continue buying into smaller mobile service providers for another one or two years, and the mature mobile Internet market will be dominated by a few large players instead of many small ones.

Major tech acquisitions in 2013

On Sep 16, 2013,

Tencent announced it would buy a stake of 36.5 percent in Sogou, the country's third-largest search engine, for $448 million plus other assets.

On Aug 23, 2013,

Baidu said it would buy a 59% stake in Chinese group-buying site Nuomi for $160 million.

On Aug 14, 2013,

Baidu agreed to buy app store 91 Wireless for $1.85 billion, the biggest deal in China's IT sector.

On May 10, 2013,

AutoNavi Holdings, a Chinese digital mapping company, announced that Alibaba would buy a 28 percent stake in AutoNavi.

On May 7, 2013,

Baidu announced its purchase of video service provider PPS Net TV for $370 million.

On April 29, 2013,

Alibaba announced to acquire 18% of Sina Weibo for $586 million.

In April 2013,

Alibaba Group purchased data provider Umeng for $80 million.

On Jan 10, 2013,

Alibaba Group acquired social music website xiami.com.

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