Qihoo 360 Case Study

3674 Words 15 Pages
Register to read the introduction… In March 2006, Sequoia Capital, IDG and Zhou Hongyi jointly invested US$20 million in the company. And in August 2006, Zhou Hongyi joined Qihoo as Chairman. At the beginning, Qihoo was positioned as a search technology provider, yet its efforts in the sector were not successful. Zhou later concluded, “At that time, Qihoo was too far ahead of the game in terms of its ideas and strategy. While the concept may have been right, it was the wrong moment. Moreover, Qihoo failed to figure out the key drivers of user need.” In 2006, Qihoo entered the field of Internet security, as Zhou recognized that Internet …show more content…
This widespread practice made the public furious. Despite user needs, no firm developed products to clear up malicious software, for two reasons. First, it was difficult to make users pay for a malicious software cleanup service. Second, it would offend many large software firms that relied on this kind of software. “The fact that the Internet industry in China was overrun by malicious software made me decide to develop something to remove them,” said Zhou Hongyi, “If I didn’t do it, I would always be deemed as the creator of malicious software. I admit I made some mistakes, but the mistakes could be corrected.” Therefore, Zhou set up an internal team to work on an application that would clean up malicious software. In July 2006, 360 Safe Guard was officially released, a freeware dedicated to the cleanup of malicious software. Targeting real use needs, 360 Safe Guard hit the market with immediate success. Later, a number of other features were added to 360 Safe Guard, including system cleanup. By June 2007, the market share of its monthly unique users grew to …show more content…
By June 2008, there were 155 million monthly users of Internet security applications in China, covering 67.5% of Internet users across the country. The key players in China’s anti-virus market included Rising, Kaspersky and Kingsoft. These three companies had market shares of 37.59%, 24.40%, and 12.93%, respectively. All of them generated revenue by charging subscription fees to their users. However, Zhou pointed out that “Internet security is now becoming a basic service for Internet users, which should be free of charge, the same as other basic Internet services, such as search engines, instant messaging and email.” Before Qihoo developed its own anti-virus software, Zhou attempted to convince a few anti-virus developers to work with them to create a free anti-virus application. Finally, Qihoo and Kaspersky, a leading information security provider, joined hands. According to the partnership agreement, Qihoo would promote Kaspersky’s anti-virus software via 360 Safe Guard, free of charge in the first 6 months, and as a paid distributor afterwards. After a period of collaboration, Zhou realized that it had become a “renovation rather than revolution. In spite of the price cut from RMB200 to RMB30, many users were unwilling to spend the money. Security services should be absolutely free.” Nonetheless,

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