Tencent takes stake in Sohu's search unit

Chinese internet company Tencent (00700.HKG) bought a 36.5% stake in Sohu’s (Sohu.NASDAQ) Sogou search unit for US$448 million, Bloomberg reported. Tencent has the option to increase the investment to 40%, according to a joint statement by the companies on Monday. Sohu will remain the controlling shareholder in Sogou. Joining forces could help the companies compete against Baidu (BIDU.NASDAQ) in search and mobile internet as users spend more time on smartphones and tablet computers. China’s online population surged almost seven-fold since Tencent’s 2004 IPO, with revenue at billionaire Pony Ma’s company more than doubling in the past two years.