Cheetah Mobile Files For IPO AT The NYSE to Raise $300M.
Kingsoft Corporation had previously announced two months ago that it would begin to spin off a business unit modeled around Internet security and other service. listing its shares in the U.S. This spin off has managed to file with the U.S. Securities and Exchange Commission and has been renamed Cheetah Mobile, which was previously known as “Kingsoft Network” in Chinese and developed a web browser dubbed Cheetah. Cheetah Mobile has planned to raise up to $500 million on the NYSE.
Kingsoft had previously acquired Conew, known as Keniu before. a Internet security and photo editing service provider back in 2010, while merging it into a its own anti-virus business. Founder and recently named CEO of Conew, Sheng Fu, has commented that the company would be mainly focused on security software.
Fu had previously worked with CEO of Qihoo, Hongyi Zhou, both of them were in the process of developing the online security product at Qihoo before the two had an argument and Fu departed from the company. Qihoo had sued Fu for supposedly using confidential information about during the creation of Conew security product. Employees who previously worked at Qihoo and snapped up by Conew, had commented quite negatively on Qihoo.
The acquisition of Conew was a strategy for Kingsoft to compete against Qihoo, who has disrupted the Chinese Internet security market by making its paid services available for free. Conew had decided to take a page from its rival company and with the combined forces of Kingsoft’s anti-virus business, it would begin to offer their services for free, while developing its web browser cheetah and expanding overseas.
Cheetah had adopted Qihoo’s business model as well, With A handful of other Chinese Internet companies also following the same line of thought and offering free Internet services, which has including some of the giant Chinese input method service provider Sogou, had also adopted Qihoo’s model. By offering their customers the use of their software for free on their web browser, they would be able to monetize through the use of search marketing, advertising means and online gaming.
81.7% of the total revenue gained by Cheetah Mobile during 2013 was through the use of advertising, and the other half came from their gaming, according to the company.
It was believed that companies like Baidu and Tencent have been backing Cheetah to compete against Qihoo. With Tencent become bitter rivals some time during 2010. Tencent has invested in Cheetah and currently holds an 18% stake within the company. Baidu has recently felt threaten by Qihoo, who has managed to gain over 20% more of the search market within China.
It has been revealed that both Tencent and Baidu, were the three top advertisers. During 2014, Tencent, Baidu, and Alibaba had contributed over more than 14%, 19% and 25%, respectively, of its total revenues. Tencent had also contributed over 24% during the previous year, although the decline had be due to the Tencent’s search service, Soso, had merged into Sogou.