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The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Tuesday, April 10, 2007

Sohu – Sogou – Gift for Sogou, part 1

God’s (Google’s) Gift for Sogou, part 1 - Background

God smiled on Sogou today! In yesterday’s news, Google got caught when they try to steal Sohu’s programming code. See the link:


At this point, it is not very clear what part of code was stolen. But what is clear is God (or Google, but aren’t they the same entity) gives Sogou a great marketing opportunity.

I uses google (English) exclusively. My officemate uses Yahoo. One time, we try to compare and to my surprise, the result is virtually indistinguishable from each other. But no matter what happens, Yahoo can’t get American users to switch. It became a habit for American users to use google. And habit is hard to break.

The same thing faces sogou. Ever since Sogou v3.0 came out, it is competitive with Baidu and Google. If you go to the search engines comparison tool:

One can tell Sogou is very competitive. To this date (4/10/2007), Google has the best score with 18692 users ranked it as the best, Sogou is next with 17839 and Baidu is last with 15926.

I tried the test and I absolutely can’t tell who has the best search results. If I try it 6 times, the result will be 2 for Google, 2 for Sogou, 2 for Baidu.

One thing that Sogou is the best is it has 10.5 billion indexed pages as its database.

But Sogou has horrible reputation in China right now. Remember two years ago, in 2005, how strong was Sogou when the version 2.0 came out? See the following for the Alexa chart for Sogou:

The reason Sogou v2.0 was so hot has little to do with Sogou itself but has everything to do with a tool that Sohu pushes. That tool is called Sogou Toolbar. The following is the Sogou Toolbar:

As one can see, it has Sogou search, it has page ranking, it has TV, Music and RSS news feeder. It also has Popup blocker and download accelerator. If the users want, they can also put weather, stocks, etc. on the toolbox.

This is a great idea. Sohu knows if they want to get Chinese users to break the habit of using Google or Baidu, they have to give them something extra.

But in their haste, they did something abhorrent; they made Sogou Toolbar a spy ware. The toolbar will be downloaded to the Chinese users without their permission. Part of the toolbar is hard to uninstall.

Sogou did grow exponentially in 2005 for a period of six months, until Chinese users get sick of its practice.

Sohu no longer does that. But the damage is done. Sogou and Sogou Toolbar have a stench of bad reputation around them.

Sohu try to repair the damage by providing a free tool called Sogou Pinyin Input Method. And so far, that free tool seems to be pretty popular.

Another thing that is a little different in China is that, to a lot of Chinese, the number 2 (Google) has better technology than the number 1 (Baidu).

But for reasons out of control of Google, such as slow query time (because the server is not in China) and occasional blockage by Chinese government, Chinese users can’t form a habit to use Google.

Now, let me summarize the background information:

1. Sogou is technologically competitive to the leaders, Baidu and Google. Not better and not worse.
2. But Sogou does have the largest indexed web pages database.
3. Sohu tried to push Sogou through Sogou Toolbar. But it did it in unethical mean.
4. Sogou and Sogou toolbar has horrendous reputation as spy ware (even though Sohu had stopped that practice).
5. Sohu developed a free tool called Sogou Pinyin Input Method Editor to try to repair the tawdry image of Sogou.
6. Google actually has better reputation than all other search engines to many Chinese users.

In part 2, I will talk about what I think Sohu shall do.

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