About this Blog

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.

Saturday, January 17, 2009

Sohu.com to Roll Out its Own Web Browser

I had been talking about a project by Sohu that could completely change the landscape of China's Internet industry. That project is called Sogou Pinyin Input System. My last article about it can be found here:
http://chinese-net-gaming-stock.blogspot.com/2007/10/chinese-internet-pinyin-input-system.html

There will be exciting news about that project in the near future. I will write a few articles about the progress of that project in the future.

Similar to the Sogou Pinyin Input System, browser is another application that could fundamentally changes the internet landscape. Remember the fight between Netscape vs. Microsoft.

Sohu is not satisfied with the success of the Sogou Pinyin Input, it has officially entered the browser war in China.

On 12/22/2008, Sohu officially announced the beta version of its Sogou web browser. One can go to its official web site:
http://ie.sogou.com/

In the middle left hand site of the official web site, there is a video. You can play that video. That video gave a pretty good description of what Sohu felt is superior of its Sogou browser over other browsers.

The first part of the video talks about it is much more stable than other browsers. The second part of the video talks about its 6 new features that other browsers don't have.

Sogou browser shares the same browser engine as that of Microsoft Internet Explorer or Maxthon (傲游). Therefore, it is different than Google's Chrome (that is based on Webkit browser engine) or Firefox (that is based on the Gecko browser engine).

I believe Maxthon is pretty big in China. Google has partial ownership to Maxthon. See the following:
http://www.techcrunch.com/2007/04/10/google-takes-partial-ownership-of-maxthon-browser/

From the above article, Maxthon has had over 80 million downloads of its browser, and over half of its users are in China. Maxthon-originated searches may account for up to 25% of total Baidu traffic, according to one source.

The following are some Chinese review articles:
http://news.newhua.com/news1/Skills_tools/2008/1223/081223132830DFAK1A7C53H66F34IAF6A60IH3H5D7EEB66H50B02K57.html
http://www.cwrblog.net/1245/sogou-released-its-own-internet-browser.html
http://news.skycn.com/article/18747.html
http://www.awflasher.com/blog/archives/1630
http://it.sohu.com/20081222/n261350959.shtml
http://news.skycn.com/article/18747_1.html

Some education internet users review its acceleration feature.
http://www.appinn.com/sogouexplorer-beta/

I will give a quick description of its unique features.

1. Multi-Task Asynchronous Browsing. Sogou Browser is a multi-tab browser. But unlike other mult-tab browsers, it makes every tab independent. That means if one tab become unstable, it won't affect other tabs. You can close the unstable tab without losing your browsing session. This allows for the browser to be much more stable.

2. Independent video broadcast. Lets say you went to youtube.com. You want to view a video. You can pop that video out of the web page. Move it aside or resize it. That way, if you want to watch that video while browsing other (non youtube) web page, you could do that.

3. Smart address bar. It gives you search result as you type in an address.

4. Privacy browsing. Allows you privacy while using public computer.

5. Gives you easy access to your most frequent visited sites.

6. Accelerate browsing for users using the education network in China. It also allows for the users in the education network to access foreign content for free.

Now I will provide my own comments on what I think about the above features, starting from the least important.

The least important new features is number 5. It sounds good, but I don't think anybody will use it. Besides, a lot of other newer browsers have already added that features.

The second least important new feature is number 1. If you go to every review articles, every internet technocrats regard this as the number 1 issue for every browser. But as a stock investor, I don't think this is very important. The most stable browser (Google Chrome and Firefox) have much less market share than the least stable browser (Microsoft's IE). Therefore, as a stock investor, I don't think the stability of a browser is that important to the market share of a browser.

Independent video broadcast is a little neat feature. Most Chinese internet users are young people and they like neat features.

Smart Address bar is a feature that is very important to Sohu. It won't win any market share for Sogou Browsing. But this feature will allow Sohu to monetize the Sogou Browser by directing more traffics to Sogou search. Sogou Browsing will always be free. Therefore, it has to be monetized through indirect features. This is one way to do it and Sohu can make a lot of money through search.

Privacy browsing is a very important little feature that are very attractive to a section of Chinese internet users. There is a big segment of Chinese internet users who don't have computer at home. They get on line either through school, work, or internet café. When they use computers in internet café, they don't want people to find out their browsing history. This feature shall grab quite a few users. Unfortunately, this feature is quite easy to implement. In addition, a lot of other newer browsers are starting to add this feature. This advantage probably won't last long.

But all these little features (features 1 through 5), Sogou browser is just another new browser. It probably won't even get 1% of the market share in China.

The killer feature is however, the accelerated browsing for China's Education and Research network users. It also provide free access to foreign websites for China's Education and Research network users, normally a paid service for campus network subscribers.

This is a great feature. There is seldom any example of a new product in a flooded market that upon its initial release, would already have a big group of users waiting for them.

But unlike some earlier report that Sohu will provide functions that will somehow let its users to indirectly bypass the great firewall of China. It does no such thing. As a stock holder of Sohu, the last thing I want is for Sohu to have confrontations with Chinese government.

All this feature provided is that Sohu will provide dedicated servers so that China's students and researchers will access domestic news much faster and foreign web sites (that are approved by Chinese government) for free.

I am getting more and more impressed with Sohu every day. It seems to do everything right. It knows how to market its product and hype its portal's reputation. It is able to execute tremendous large project in a short time frame (its Olympics coverage). It is able to hire great talents and develop great products (Sogou Pinyin and Sogou Browser). It has a lay back CEO who let its talented marketing, management, and R&D team doing their things. But the same CEO is also able to focus the whole company in high value projects in a timely fashion.

Education network acceleration feature is one such example. There are a lot of companies developing browsers in China now. They all know the importance of the browser market in China (unfortunately, Wall Street has no clue of the significance of applications such as Pinyin Input Method or Browser). But no company had thought of doing this great feature. This feature allows Sogou Browser to lock up 5% to 10% of customer base from the starting gate.

Sogou Browser and Sogou Chinese Input System are potential historical moments. If Sohu can dominate Chinese Input System and Browser, it can dominate China's Internet industry (the whole industry, not just the portals or the advertising) the same way Microsoft uses its Windows operating system to dominate PC software industry in the 80』s and 90』s.

At this point, Sohu just started its Browser war. But the war on the Chinese Input System is almost over. If I have time, I will write a few articles on the progress of Sogou Chinese Input System.

In the 1970』s and 1980』s, it was an exciting time for the PC software industry. You have Word Perfect doing great word processing program. There is Lotus doing great Spreadsheet program. You also have Netscape doing great browser. There are a lot of other companies coming out with great products.

But Microsoft came in with one application (Windows) and just suck the whole industry dry. They basically monopolized the whole industry.

It is very possible that the history will repeat itself here in China. Except the company is not Microsoft and the industry is China's Internet industry.

5 comments:

Anonymous said...

Thanks for the analysis.

I have followed sohu almost daily day since 2001; Charles Zhang appears to be honest and decent; unlike sina's management, which appalls me in stealing the company (awarding themselves disproportion amount of options and stocks to themselves) for its total mismanagement of the company which was best positioned 8 years ago. The track record foretells a fiasco coming in digesting the recent FMCN acquisition.

Sohu now is the most focused company . I agree with its sharp focus on internet media (news & entertainment & search). I think only Baidu & Tencents can stop sohu. But Baidu appears to wandering without focus recently, almost like yahoo. I never touched Baidu in the last five years. It appears that I was right. Tencent QQ is far more formidable than Baidu; but I don't follow QQ and know little of it.

Sohu intends to spinoff its hugely profitable game sector when bull market returns. It seems to me that it would be best to side with Mr Zhang when that happens, e.g., sell the game shares and return to sohu share. what's your opinion on the spin off and the motive?

HenryC said...

Hi, thanks for your analysis.

Tencent QQ is a formidible foe. They are eating into every sectors of internet industry in China. It is why Sohu's chinese Input methods and Browser are so important.

It is a battle that could determine the fate of China's internet industry in the next five years.

It is also a battle that Wall Street has no clue of.

In terms of why are they want to spin off the game sector. I have no idea. I tried to find articles of Charles Zhang's explanation. I can't really find a detailed one.

It could be a good move, or it could be a bad move. But I have no idea.

Note that China's number game portal, 17173.com, belongs to Sohu. It is possible that Charles wants to put some separation between 17173.com and Sohu's game division.

Anonymous said...

Thanks, good point. Game will be cash cow for the next five years.

For game spinoff, I think Zhang suspects game's prosperity (hypergrowth stage) won't last very long, on the order ~3 more years. Maybe lasts long enough to sustain Sohu's drive of pinying input, browser, and search to surpass Baidu in search and sina in news. So, I suspect the major reason of spinoff is to give him the option of totally letting go of game at a fair price and not to distract the main business. Others including ones you pointed is to prevent in-fight.

3 to 5 years from now, huge fortune will be made in ads from news, entertainment (including web based TV programing), and search when total Chinese internet ad will enter hyper growth stage and newspapers will fade quickly and TV like CCTV will stagnate at best.

Anonymous said...

[url=http://tinyurl.com/getvpn][b]Click here to get VPN service![/b][/url]

[b]Anonymous surfing[/b]
Using our service you'll be fully anonymous in the Internet. Hide your IP address, and nobody will know that strange visitor from Germany ( Great Britain, Estonia and so ), is you.

[b]Full access to network[/b]
You can use any services, access any sites and use any software with us. BitTorrent, Skype, Facebook, MySpace, Twitter, Pocker .. we have no restrictions.

[b]Traffic protection[/b]
Don't worry, from this moment all you data will be protected using 256 bit Blowfish encryption algorithm. Nobody can access your internet data.

[b]Wide variety of countries[/b]
You can choose one of over twenty high speed servers located in different parts of the world, from South America coast to islands in Indian Ocean.

Related keywords:
anonymous surfing review
proxy server vpn
anonymous secure surfing
proxy vpn
anonymous vpn free
internet explorer vpn
vpn dial up
ssl vpn
Traffic protection
anonymous surfing freeware
anonymous surfing software
vtunnel
anonymous surfing vpn
best anonymous browser
surf the web anonymous
best anonymous surfing
anonymizer anonymous surfing review
firefox anonymous surfing
Virtual Private Networks
Free Vpn Client Software
anonymous surfing software
[url=http://dasbmw.ru] anonymous surfing software[/url]
[url=http://seobraincenter.ru] anonymous proxy[/url]
[url=http://carlwebster.com/members/Alexander-Pwnz.aspx]Buy Cheap Zoloft[/url]

Anonymous said...

[url=http://tinyurl.com/getvpn][b]Click here to get VPN service![/b][/url]

[b]Anonymous surfing[/b]
Using our service you'll be fully anonymous in the Internet. Hide your IP address, and nobody will know that strange visitor from Germany ( Great Britain, Estonia and so ), is you.

[b]Full access to network[/b]
You can use any services, access any sites and use any software with us. BitTorrent, Skype, Facebook, MySpace, Twitter, Pocker .. we have no restrictions.

[b]Traffic protection[/b]
Don't worry, from this moment all you data will be protected using 256 bit Blowfish encryption algorithm. Nobody can access your internet data.

[b]Wide variety of countries[/b]
You can choose one of over twenty high speed servers located in different parts of the world, from South America coast to islands in Indian Ocean.

Related keywords:
anonymous surfing review
proxy server vpn
anonymous secure surfing
proxy vpn
anonymous vpn free
internet explorer vpn
vpn dial up
ssl vpn
Traffic protection
anonymous surfing freeware
anonymous surfing software
vtunnel
anonymous surfing vpn
best anonymous browser
surf the web anonymous
best anonymous surfing
anonymizer anonymous surfing review
firefox anonymous surfing
Virtual Private Networks
Free Vpn Client Software
anonymous surfing software
[url=http://dasbmw.ru] anonymous surfing software[/url]
[url=http://seobraincenter.ru] anonymous proxy[/url]
[url=http://carlwebster.com/members/Alexander-Pwnz.aspx]Buy Cheap Zoloft[/url]

FAQ

A test for now

Followers