Qihoo 360 is an internet security company. They make anti-viruses, and they make them well. Qihoo has until recently been a B2C company, selling products like anti-virus software, mobile devices, etc. to end consumers. But in recent years, Qihoo is starting to capitalize on its government potential.
On Qihoo’s website it specifically says that “360 company is the largest provider of Internet and mobile security products in China. Founded in 2005, the company is the pioneer of free Internet security. It launched 360 Total Security, 360 Mobile Security, 360 Security browsers and other national security products, as well as 360 enterprise security browsers for government and enterprise users.”
Back in 2016, China Daily reported that Qihoo is getting into the government market with a new phone featuring data protection: “The move is part of the Beijing-based group's broad efforts to tap into the government internet security market, as a rising concern over national security prompts governments and State-enterprises to embrace domestic IT products,” said the article.
When the media started reporting a falling out between best friends and business partners Zhou Hongyi and Qi Xiangdong, some people weren’t buying it. Many claimed that Qihoo 360 has, in fact, been strategically divided into 2; the B2C part, which is still headed by Zhou Hongyi, and the B2G part which is now headed by Qi Xiangdong. As stated, while some articles claim Zhou and Qi “changed from family to opponents”, others think this is just a ruse meant to formally separate the commercial and government worlds.
Qi’s entity, Qi Anxin, was registered and established back in 2014, mainly providing corporate security products for enterprises such as the government and large central enterprises. With this sector growing rapidly, it makes sense to separate the two. Governments like to receive services from smaller, more confidential companies who understand the need for secrecy and confidentiality. Tech giant Qihoo 360 cannot serve governments well while also employing thousands of people.
Many, including Daniel Ren for SCMP, think the NYSE delisting and SSE relisting could also be explained by Qihoo’s desire to get state cybersecurity contracts.
“We want to become not only the largest Chinese company dealing with internet security, but also the largest domestic company in the security field,” Qihoo founder and chief executive Zhou Hongyi told reporters in 2017. Perhaps Zhou and Qi had information that Beijing will ease rules on overseas-listed Chinese technology companies returning to Shanghai.
It is unclear if Qi and Zhou really did have a falling out, but what is sure is that these two savvy businessmen and tech entrepreneurs know what they’re doing. Raking in billions in profits from a successful listing while also enjoying newfound access to PRC government contracts sounds just like something these two could come up with.