January 9, 2014 / 3:16 AM / 4 years ago

REFILE-UPDATE 1-China's Qihoo 360 denies Alibaba to take stake in company

By Paul Carsten

BEIJING, Jan 9 (Reuters) - Chinese Internet company Qihoo 360 Technology Co Ltd denied on Thursday that e-commerce giant Alibaba Group Holding Ltd would take a stake in the company after its shares surged almost 10 percent on Wednesday on speculation the two were in talks.

“These are rumours someone has made up,” said Qu Xiaodong, vice chairman of Qihoo, which has a market capitalisation of $10.93 billion and specialises in security software and is China’s second-largest search engine by users.

Alibaba, which is gearing up for an IPO that could conservatively value the company at more than $100 billion, said it does not comment on rumours or speculation.

Qihoo shares shot up 9.3 percent on Wednesday on rumours the two companies were in the advanced stages of discussions for Alibaba to take a stake in Qihoo.

Alibaba and Qihoo have cooperated in the past, having launched a product search engine for online shopping in May last year.

Qihoo has already captured 22.5 percent of China’s search engine market as of December since breaking on to the scene in 2012, according to Alibaba-owned Internet data analysts CNZZ.

It is second only to Baidu Inc, whose search engine market share in China fell to 63 percent as of December from 80.4 percent in August 2012, when Qihoo launched its own search product.

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