Tencent’s US$2.1 billion buyout of online search service Sogou could supercharge WeChat

guest · Jul 28, 2020

Tencent’s US$2.1 billion buyout of online search service Sogou could supercharge WeChat, analysts say
The proposed deal follows Tencent plan to invest around US$70 billion over the next five years in new digital infrastructure
July 28, 2020
https://www.scmp.com/tech/big-tech/...lion-buyout-online-search-service-sogou-could

Internet giant Tencent Holdings’ proposed US$2.1 billion buyout of Sogou, China’s second-largest online search service, could help supercharge its WeChat app, while shaking up a market long dominated by Baidu and fending off potential competition from ByteDance, according to industry analysts.

Tencent, currently Sogou’s biggest shareholder, on Monday made a preliminary offer to take the company private, proposing to pay US$9 a share for 61 per cent of the search engine operator it does not yet own.

The offer seems to indicate aggressive plans to further integrate Sogou’s search engine into Tencent’s multipurpose messaging and social media platform WeChat, according to Mark Natkin, managing director of Marbridge Consulting in Beijing.
Super app WeChat, which has more than 1.2 billion monthly active users, has long been using Sogou as its default search service.
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He added that Tencent’s full control of Sogou would make integration easier and allow the internet giant to enjoy all the profits that such combination of resources might generate.

Should Tencent fully integrate Sogou into WeChat, that would pose a challenge to Baidu, according to Natkin from Marbridge Consulting.
Baidu currently dominates China’s online search service sector [...]

“We expect there will be more synergies between the two companies in search and smart devices in the future upon completion,” Jefferies analyst Thomas Chong wrote in a research note, describing Tencent’s proposal as “a surprise to the street”.
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guest · Sep 30, 2020

Tencent offers to take Chinese search engine Sogou private as US-China relations worsen
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Tencent to take China's Sogou private in $3.5 billion deal
September 28, 2020
https://www.reuters.com/article/us-...gou-private-in-3-5-billion-deal-idUSKBN26K22M

Sogou Inc said on Tuesday shareholder Tencent Holdings Ltd would take the web search firm private in a $3.5 billion deal, making it the latest Chinese company to exit U.S. markets as tensions mount between the world’s two largest economies.
Controlling stakeholder Sohu.com Inc said it would receive about $1.18 billion in cash from Tencent as part of the deal, sending its shares up about 14% in premarket trading.

Sogou, which was founded in 2005 and debuted on the U.S. market in November 2017, generates revenue mainly through search advertising services.
Goldman Sachs( Asia) is acting as financial adviser to Tencent on the deal, which is expected to close in the fourth quarter of 2020.
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Tencent’s US$2.1 billion buyout of online search service Sogou could supercharge WeChat

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