Sogou is considered a core business for Sohu, with a product offering that includes Pinyin, browser and search. Further, Sogou has reported strong growth in recent quarters. It is a source of innovation for the company and its apps provide Sohu with a mobile starting page.
Sogou’s core products are Pinyin, browser and search. Sogou Pinyin is the top software application for Chinese language input, with 88% penetration based on monthly active users. Sogou browser is the number three browser in China, with a 25% user penetration rate as of March. Sogou search is the number three search engine in China, with 8% market share as measured by traffic.
Strength in the Sogou search business is being driven by growth in customers and cost per click (CPC). Daily webpage views totalled 71m in March, up 8% y-o-y. Sogou search had 37k advertising customers in 1Q, an increase of 23% y-o-y. Average revenue per account (ARPA) was USD679k in 1Q, up 35% y-o-y.
Key advertising categories on Sohu include healthcare (16% of revenue), E-commerce (14%), game and IT (8%), travel and living services (6%), and education (4%).