Sohu’s search monetization strategy

Just want to talk a little bit about how Sohu is going to monetize its search engine, Sogou.

My last post that is sogou related is here:

http://chinese-net-gaming-stock.blogspot.com/2007/09/cnnic-2007-search-market-survey.html

It has a two prong strategies. First, it is going to use all of Sohu’s properties to sell Sogou. See the following web site:

http://www.sogou.com/fuwu/jingjia/tushi.html

If a company buy a key word on Sogou, it will not only be buying a presence on the search engine, sogou, it will also buying a presence in other Sohu properties such as emails, blogs, portal channels (news, sports, etc.), etc.

In addition, on 3/14/2008, it also start a service called Sogou 800. See the following web page:

http://www.sogou.com/fuwu/ppc.html

If a company become Sogou’s consumer and buy a key word, and when an internet user search on Sogou using that key word, that company information will of course be part of the search result. Nothing different here from other search engines.

But now, there will be a little green telephone sign next to the search result. The internet user can then click on that sign and give sogou his or her phone number. Sogou then will connect between that internet user with the customer service department of that small company. The first 10 minutes of phone service will be paid for by Sogou.

It is an interesting service. I have no idea how effective will this service promote Sogou.

But if it is effective, Sohu will incur some additional expenses in return for being a player in China’s search engine war. On the other hand, if it is not effective, Sohu won’t have to spend much.

It is what a hit game like TLBB can do for Sohu. Now, Sohu makes tons of cashes from that game. These extra money enable Sohu to spend a lot of money to promote her other services.

For Netease, I think it is dumb for them to get into search now. But for Sohu, I think they might still have a chance.

In addition to the above two strategies, their Olympics connection might give them a head up during Olympics. Search is a force of habit. If they can convert enough users to use Sogou during the Olympics, those users might just keep on using Sogou afterward.

Finally, Sogou might have a secret weapon in its disposal. It is just purely a guess on my part right now. If I have some more time, I will probably talk more about this “secret weapon” in the future.