What the Google-Qihoo Partnership Means for Marketers

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Qihoo 360 Technology confirmed its partnership with Google is "progressing as planned" but did not let on details what that would entail.

Media reports have stated that Qihoo is partnering with Google's ad platform and that the tie up with Google China began in January.

Alex Xu, Qihoo's chief financial officer told ClickZ that advertisers could bid for ad positions similar to the display formats for Google and Bing.

The Chinese software company has been in the limelight since its web search engine so.com launched in August 2012 that swiftly captured close to 10 percent of China's search traffic. Qihoo usurped local players like Sogou, Soso, and Google to take second position behind search leader Baidu.

Meanwhile, search marketers are already using Google AdWords to buy Qihoo ads.

"If you buy a keyword on Google and do not select limited to only Google.cn or Google.co.hk, the ads would also appear on Qihoo," said TR Harrington, CEO at Darwin Marketing.

Google and Qihoo's partnership would help advertisers reach Qihoo's audience immediately rather than wait for Qihoo to develop its own ad platform and sales distributor network, he added.

Qihoo said it will be building a sales team within the company and partner with resellers "just like our peers" but did not share more details when that will be in place or which companies they will be partnering with.

When Qihoo rolled out its web search service in August last year, it replaced Google as the default search engine in its 360 browser and navigation, which its software has a substantial market share in China.

Around that period, some major media and e-commerce websites have started to optimize for Qihoo.

Kun Tang, business development director at The Egg Company, said even though Qihoo owns 10 percent of search share, it still accounts for a significant amount of traffic due to the huge size of the websites.

Because Qihoo have lesser paid listings and algorithm updates compared to Baidu, search engine optimization (SEO) professionals found their work have paid off optimizing Qihoo.

Unlike Baidu that launched its webmaster platform in 2011, Qihoo has already offered a webmaster tool that allows companies to submit indexation and apply SEO best practices.

"However, for marketers with websites of smaller scale, like brand or B2B corporate sites, they may find the return in traffic not that obvious to optimize for Qihoo," Tang added.

On the PPC front, Harrington pointed out that Qihoo is following local search engines Sogou and Soso to offer Brand Zone or Brand Link ad format for clients.

Brand Zone is a popular ad format in China first offered by Baidu that allows big companies to feature its brand logo, description with in-text links, images, and video on its SERP.

Harrington said the ad format has been successful for his ecommerce clients as conversion rates are very high when users search for a brand related keyword regardless of the engines they are searching from.

The CTR on Brand Zone is much higher than from top organic results or a single PPC ad link even in the first position. Hence, most brands would be very willing to buy this ad format on Qihoo as they did with Sogou and Soso, he explained.

Despite these developments, Harrington said Qihoo is not going to threaten Baidu.

"They (Baidu) will remain the king of search in China for the foreseeable future."

The big impact of the Google relationship is that this allows Qihoo to monetize and advertisers to reach their audience so they will take some share from Baidu and potentially Sogou and Soso, he noted.

The chart below from iResearch shows that Baidu continues to own the lion's share of search revenue share at 80 percent, followed by Google China at more than 15 percent.

Source: iResearch

However, Tang pointed out that Qihoo has a strong position in mobile as it controls the mobile anti-virus and app management with its mobile search traffic growing.

With a good knowledge of mobile user behavior, Qihoo could provide more customized mobile ads in the future, he said.