On the evening of July 27th, sogou announced that he had received an offer for the privatization of Tencent. Specifically, Tencent plans to acquire other shares of sogou at a price of $9 per share. If the transaction is successful, sogou will be delisted from the US stock market and become an indirect wholly-owned subsidiary of Tencent.
Subsequently, Sogou CEO Wang Xiaochuan responded in the WeChat circle of friends: "Thanks to Tencent for its recognition of sogou’s value, technical capabilities and product innovation capabilities. Next, we will seriously discuss and measure the related issues, so that sogou can continue to create greater value for users. 」
An industry insider said that he was not surprised to learn this news. After all, the collaboration between sogou and Tencent’s current business is getting higher and higher. Surprisingly, he didn’t expect Tencent to move so quickly. In addition to the wholly-owned acquisition of game companies, Tencent really wholly-owned a medium-sized mainstream Internet enterprise, and sogou should be regarded as one.
After the news, not only did sogou’s share price soar by 48%, but Sohu’s share price also rose by nearly 40%.

AI is the core value.
In fact, Tencent was already the largest shareholder in sogou before the tender offer was made. According to sogou’s 2019 annual financial report, Tencent holds 39.2% of the shares of sogou and Sohu holds 33.8%.
The official relationship between Tencent and sogou dates back to September 2013. At that time, Tencent injected US$ 448 million into sogou with some sincere conditions.
This is a big gift package. Ma Huateng, the founder of Tencent, wrote in the internal letter of the company: "Tencent merged the search and QQ input methods with the existing business in sogou to form a brand-new sogou company. This brand-new sogou will continue to operate independently as a subsidiary of Sohu.
In June, 2014, sogou search announced its official access to WeChat WeChat official account data. From then on, you can browse or query related WeChat official account and all articles by using sogou search. At the beginning of this year, Wang Xiaochuan mentioned in an internal letter that in 2019, sogou promoted the sustained and steady growth of search business with differentiated content and AI innovation.
Wang Xiaochuan specifically mentioned: "In terms of ecological construction of content services, we will deepen cooperation with WeChat WeChat official account, supplement content through cooperation with official websites, experts and academic websites, and explore opportunities for intelligent triage with medical care as the starting point. On this basis, the coverage and accuracy of the first direct answer of intelligent question and answer will continue to lead the industry level. 」
Holding hands with Tencent to open up the content resources of WeChat Ecology is an important supplement to the search pool in sogou. But cooperation does not stop there. If Tencent’s acquisition of sogou is successful, the two companies will cooperate in more business aspects in the future.
At present, sogou is the second search company in China. At the same time, with sogou input method, Sogou browser and other products, sogou has accumulated a large number of users. According to the financial report in the first quarter of this year, the daily active users of Sogou mobile phone input method exceeded 480 million, and the daily average voice request peak of Sogou mobile phone input method reached 1.4 billion, which continued to be the largest voice recognition application in China.
More importantly, sogou is a technology company focusing on AI research in the language field. Its accumulated technical capabilities such as speech recognition and translation are also among the top in China. This is also the key factor for Tencent to actively acquire sogou.
In recent years, with the incorporation of Tencent AI Lab, Tencent Youtu, WeChat Zhiling and Dingdang voice platforms into CSIG, Tencent’s layout in the field of artificial intelligence has begun to move on the right track.
At the Tencent Forum of the 2020 World Artificial Intelligence Conference, Si Xiao, Dean of Tencent Research Institute, officially released the "Tencent Artificial Intelligence White Paper: Ubiquitous Intelligence". For the first time, the white paper reveals Tencent’s internal understanding of AI technology and the thinking of intelligent business layout, which is mainly divided into five latitudes-macro environment, technology research, landing application, innovative economy and institutional guarantee.
Machine learning, computer vision, intelligent speech and natural language processing are defined as the development direction of artificial intelligence by this white paper. The technical research on AI, especially the research on natural language processing, is exactly the direction that sogou focuses on.
The new infrastructure was written into the government work report for the first time this year, and artificial intelligence is the seven major areas of new infrastructure. For Tencent, which holds high the banner of industrial Internet, only by strengthening its own AI technology capabilities can it better realize its capability output and empower the industry.
Therefore, the current business collaboration between sogou and Tencent is getting higher and higher. AI is the relative shortcoming of Tencent, but it is the core value of sogou. It is understood that the board of directors of sogou Company will form a special committee composed of independent directors to consider Tencent’s acquisition proposal.

Wang Xiaochuan’s "Breakthrough"
From the outside world, sogou was originally a company with search engine as its core business. After listing on NYSE in November 2017, Wang Xiaochuan quickly released sogou’s future AI strategy to the public.
This strategy consists of two parts. First, it is human-computer interaction, which involves the understanding of language at the perceptual and cognitive levels; Secondly, it takes language as the core and improves its reading and reasoning ability around machines, which is called knowledge computing.
Wang Xiaochuan said, "The crown jewel of artificial intelligence is natural language processing. In natural language, the ultimate question is question and answer. How to make the machine master the ability of acquiring knowledge or reasoning and thinking with language as the core is what we are doing. And this problem, no one knows the optimal solution yet, everyone is trying.
On the talk show "Thirteen Invitations", Xu Zhiyuan once asked Wang Xiaochuan a question, "What is the thing that excites you now? "Wang Xiaochuan said," there are some problems that no one can solve, but you have found a way to solve them. 」
The greatest charm of language is that it is a tool for us to know the world. What is the problem that Wang Xiaochuan hopes to solve with AI technology in this field?
At the IF conference held in Geek Park at the end of 2019, sogou introduced a new generation of AI translation. The general AI translation is to listen first, and then translate the text understanding. Sogou, on the other hand, is a translator who can see and think.
When a guest speaks PPT on the stage, the machine can read his PPT, extract the concept mentioned in the middle, and then find the explanation and related content of this concept according to the background knowledge base or knowledge map. After the release of this system, compared with traditional machine translation, the error rate will drop by 40%.
Wang Xiaochuan said, "In the long run, AI in the language field may eventually become your virtual personal assistant. Personal assistants need to have two abilities, one is to communicate with you, and the other is to master knowledge in some fields, which can turn information into knowledge and even provide you with wisdom. 」
If we can sum up what sogou has been doing in one sentence, it is to make it easier to express and obtain information.
AI research is a frontier investment for the future. Frontier means that for a company, it may be a business that needs a lot of money and resources for a long time and cannot be realized quickly. Therefore, if AI research is to be sustainable, the company’s basic disk must be solid.
At the beginning of this year, Wang Xiaochuan wrote an internal letter to all employees. In the letter, he regards "breakthrough" as the key word for sogou this year. He explained that in an environment that is both an opportunity and a challenge, breakthrough means getting rid of existing cognition and rules, dare to think and fight, and dare to find new directions and boundaries.
Hand in hand with Tencent can, to some extent, bring sogou the expected stability. On the basis of the existing business, it also brings more opportunities for sogou to break through. The relationship between the two is like a company holding the seeds of future technology and a fertile soil that needs future technology supply.
Editor in charge: Jing Yu