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Rumor: Qihoo 360 Investing $661 Million Into HTC

July 29, 2015 - Written By David Steele

Qihoo 360 is a Chinese internet security company generally known for its antivirus software, 360 Safeguard and 360 Mobile Safe, plus the 360 Browsers. The business was founded a little over ten years ago in June 2005. Three years ago, Qihoo 360 entered the smartphone market with the launch of the Qihoo Battleship device in conjunction with Chinese electronics company, Haier: Haier built the hardware and Qihoo 360 designed and built the software. Qihoo 360 has also introduced a web search engines, so.com and leidian.com, optimized for desktop and mobile devices respectively. Today, the source website is running a story claiming that Qihoo 360 is investing $661 million into HTC by buying 31.5% of the company. This is a substantial sum of money even in the context of Qihoo 360’s reported revenue of $1.4 billion for 2014, so if the rumor of true, Qihoo 360 must stand to gain from the investment.

There are a few reasons why Qihoo 360 might be interested in buying a large stage in HTC. The source believes the reason is because Qihoo 360 are seeking access and protection from HTC’s patent portfolio. It is also possible that Qihoo 360 are planning to utilize HTC’s expertise when it comes to building and designing smartphones and tablets, although this seems somewhat less likely. A HTC spokesperson has denied the report and claimed that neither the business nor Cher Wang has been in discussion with Qihoo 360 regarding their rumored investment into the business. Nevertheless, it is an unusual story to run. It is understand that HTC has no intention of being bought and has sufficient cash for the business to continue to run as a going concern for the next few years, although this does not mean the management team can afford to pass up an opportunity such as this one without carefully considering the implications. 31.5% is not a controlling stake in the business, but is probably more than enough to reasonably place a director or two onto the main board – a shot of cash into the business will be useful, but new board directors must be deliberated. At this juncture, the story remains a rumor but one worth keeping an eye on for now.