BEIJING, Dec. 6, 2011 /PRNewswire-Asia/ -- Qihoo 360
Technology Co. Ltd. ("Qihoo 360" or the "Company") (NYSE:QIHU), the
leading Internet company in China
as measured by active user base, today responded to a follow-up
report that appeared on the Citron Research homepage. The Company
believes the article contains numerous errors of fact and
misleading speculations. The Company would like to highlight
certain key errors contained in the story.
Undercounted advertising links on hao.360.cn:
- In the third quarter of 2011, there were a total of 125 to 130
paid advertising links on the front page of hao.360.cn, varying
insignificantly from month to month, compared to Citron's claim of
60 to 65 links.
- The Company charges its advertising customers on a per-link
basis, not per-customer basis. Therefore, certain customers'
multiple links on the front page should not be viewed as
duplicates. There are approximately 30 such "duplicated" links that
were eliminated in the Citron report.
- Tracking URL is just one of many ways that advertisers use to
measure the performance of advertising links. There are
approximately 40 paid advertising links on hao.360.cn's front page
that do not contain tracking URLs. Some long-term advertising
customers choose not to use tracking URLs because they feel
comfortable with the website's traffic pattern and also because a
tracking URL may slow down users' browsing experience in some
cases.
Underestimated prices of advertising links on
hao.360.cn:
- The average advertising price per link of RMB200,000 to RMB
250,000 cited in Citron's report was quoted from a sell-side
analyst report, which was related to the Company's operating
results of the first quarter of 2011. The Company has since then
increased per link prices in the subsequent quarters and
communicated the pricing trends to the public in quarterly earnings
calls.
- As of Q3 2011, the average price for an advertising link on
hao.360.cn's front page was approximately RMB320,000 to RMB
350,000. The average price for an advertising link on the
"Famous Sites" section of the page was approximately RMB 1 million.
- Revenues generated from the advertising links on the front page
of hao.360.cn accounted for approximately 75% of revenues generated
from all advertising links within hao.360.cn domain, including
vertical pages, but excluding search referral revenue.
Qihoo 360's web game ARPU
- Web game is a different category of games compared to
traditional MMORPG games. Typically, web games have shorter life
cycle and higher ARPU than traditional MMORPG games. Qihoo 360's
gaming ARPU is not comparable to that of other publicly listed
Chinese gaming companies because almost all of them are focusing
mainly on MMORPG games.
- Qihoo 360 does not internally develop any of the web games
placed on the Company's platform. All of those games are from
third-party developers and the in-games monetization activities
were also designed and implemented by the game developers. The
Company has formed strong business relationship with almost all
major independent web game developers in China, and the ARPU on the Company's platform
is consistent with that of the Chinese web game industry.
- The Company launched its web game platform in early 2010, and
has since experienced tremendous revenue growth. In the past two
years, the increase in the Company's web game revenues were mainly
driven by growth of paid users. The monthly ARPU has been fairly
stable at around RMB380. .
Qihoo 360 has one of the largest and most sticky user bases in
China, which is allowing the
Company to grow at a faster rate than other industry "leaders." As
a much younger company, Qihoo 360 just started to monetize its user
base and the management team believes it has a long way to reach
its full potential.
Qihoo 360 is running a very unique business model that is hard
to find a close comp in China or
globally. The Company is fully aware of the challenge and has
proactively communicated with investors and analysts at every
possible opportunity. The Company and its management are more than
willing to have direct dialogue with any parties who may be
interested in Qihoo 360, including authors of any third party
research report. The Company also encourages investors and analysts
to communicate directly with Qihoo 360's business partners and
customers to get a better and thorough understanding of our
business model and market position. However, the Company will
strongly rebut any false accusations and misleading speculation
that is and has been put forward by any parties with a biased
agenda.
Qihoo 360's management will host a conference call to discuss
related topics with investors at 8:30 a.m.
Eastern Standard Time on December 6,
2011 (9:30 p.m. Beijing time on the same day).
The dial-in details for the live conference call are:
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US Toll Free Dial
In:
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+1
866-519-4004
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US Toll / International
Dial In:
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+1
718-354-1231
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UK Toll Free Dial
In:
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+44 (0)808-234-6646
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Hong Kong Dial
In:
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+852-2475-0994
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Passcode:
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QIHU
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A telephone replay of the call will be available after the
conclusion of the conference call at 9:30
a.m. Eastern Standard Time on December 6, 2011 through 9:30 a.m. Eastern Standard Time on December 14, 2011. The dial-in details for the
replay are:
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US Toll Free Dial
In:
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+1
718-354-1232
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International Dial
In:
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+1
866-214-5335
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Passcode:
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34513856
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A live webcast of the conference call will be available on the
investor relations section of Qihoo 360's website at:
http://corp.360.cn .
About Qihoo 360
Qihoo 360 Technology Co. Ltd. is a leading Internet company in
China as measured by active user
base. The Company is also the No. 1 provider of Internet and mobile
security solutions in China as
measured by active smartphone user base, according to iResearch. In
addition, Qihoo 360 also provides users with secure access points
to the Internet via its market leading web browsers and application
stores. The Company has built one of the largest Internet open
platform in China. Qihoo 360
monetizes its massive user base primarily through online
advertising and through Internet value-added services on its open
platforms.
Forward-looking Statements
This press release contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward- looking statements by
terminology such as "will," "expects," "believes," "anticipates,"
"intends," "estimates" and similar statements. Among other things,
the management's quotations and the Business Outlook section
contain forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about Qihoo 360 and the industry. Potential risks and
uncertainties include, but are not limited to: the Company's
ability to continue to innovate and provide attractive products and
services to attract and retain users; the Company's ability to keep
up with rapid changes in technologies and Internet-enabled devices;
the Company's ability to leverage its user base to attract
customers for our revenue-generating services; and the Company's
dependence on online advertising for a substantial portion of our
revenues; and the Company's ability to compete effectively. All
information provided in this press release is as of the date of the
press release, and Qihoo 360 undertakes no obligation to update any
forward-looking statements to reflect subsequent occurring events
or circumstances, or changes in its expectations, except as may be
required by law. Although Qihoo 360 believes that the expectations
expressed in these forward-looking statements are reasonable, it
cannot assure you that its expectations will turn out to be
correct, and investors are cautioned that actual results may differ
materially from the anticipated results. Further information
regarding risks and uncertainties faced by Qihoo 360 is included in
Qihoo 360's filings with the U.S. Securities and Exchange
Commission, including its final prospectus dated March 29, 2011.
For investor and media inquiries, please contact:
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Qihoo 360 Technology Co.
Ltd.
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Tel:
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+86 10-5878-1574
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E-mail:
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ir@360.cn
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Christensen
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Mr.
Christian Arnell
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Tel:
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+86 10-5826-4939
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E-mail:
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carnell@ChristensenIR.com
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SOURCE Qihoo 360 Technology Co. Ltd.