Qihoo 360 (QIHU) Move to Chip Away at Baidu (BIDU) May Be Working

December 3, 2012 11:45 AM EST
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Qihoo 360 (NYSE: QIHU) is reaching its highest point in 18-months amid positive chatter for its potential in the burgeoning China Internet search market.

According to the WSJ, which profiled founder Zhou Hongyi over the weekend, Qihoo is taking notable market share from Baidu (Nasdaq: BIDU) following the release of its own web browser just a few months ago.

The WSJ notes that Hongyi is an "uutspoken" advocate for Qihoo. Baidu sued Qihoo in October for about $16 million, alleging that Qihoo was using "crawler" software to illicitly use Baidu content and there have been rifts between the two companies since.

China's Internet population is the world's largest at 500 million users. Hongyi says that the lack of antitrust system makes China's Internet industry a "jungle."

However, there are some strong numbers behind what Qihoo is doing. As of September, its browser has 303 million monthly active users, leading to impressive 77 percent growth in revs to $84 million. More broadly, Qihoo is also said to have about 10 percent share of all searches conducted in China.

With numbers like those, investors will to take a chance might find even more potential underlying upside for Qihoo. Shares are up 11.6 percent Monday.

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