Reports that Baidu, the Internet giant known as “the Google of China,” is planning to become a strategic investor in security software company Kingsoft gained traction today when Kingsoft announced that it is in discussions with “independent third parties relating to a possible disposal,” though it gave very little away in the rest of the release:
“If materialised, the possible disposal may or may not constitute a notifiable transaction for the Company. The Company will make further announcement as and when required in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.”
The rumors were further stoked when Zhou Hongyi, CEO of Baidu and Kingsoft rival Qihoo 360, criticized the potential deal in an interview with Sina Tech (link via Google Translate). Zhou said an alliance of his two competitors was “a big joke” that would form a monopoly, adding that he hopes Baidu will compete with Qihoo “head-on and fairly.” Investors also believe that a deal is imminent, as Qihoo 360′s share price took a dip on the reports and is still clawing its way back up.
If the Baidu-Kingsoft partnership does indeed go through, it won’t be the first move Baidu has made against Qihoo 360 in security software. In October, Baidu launched its new Baidu PC Faster suite, which is targeted at the fast-growing Southeast Asian market. As Tech In Asia noted, launching first in Southeast Asia serves as a preemptive strike against Qihoo 360′s potential plans for international expansion in that region. Qihoo 360 has not been sitting idly, however. The company is rumored to be inking its own deal with Google China, which will start soon according to a report from Wedge Partners.
Baidu had no comment.