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Fledgling Zhongsou pulls in investors
By Zhu Boru (China Daily)
Updated: 2005-04-11 09:02

Zhongsou.com, a rising star of the Chinese Internet search engine sector, confirmed it has attracted investment from US-based International Data Group (IDG) and Chinese PC maker Lenovo Group.

The company is expected to turn a profit soon, with significant growth in market share this year, according to a senior company official.

Commenting on the previously rumoured venture capital from IDG and Lenovo, Chen Pei, president of Zhongsou.com said: "Admittedly, it is true."

Although Chen would not provide details, it has been reported that IDG and Lenovo will inject US$3 million each.

Insiders say the company's technological ability in desktop searches and its business potential are major factors behind the moves.

"Surely we welcome investors, and as a matter of fact, we can easily get investors. But we are selective," said Chen.

The company needs more than one financial backer, preferably experienced in Internet-related businesses, as "we want to hear constructive opinions from them," and "an international investor is a must," he said.

Zhongsou.com, launched in 2002, is a leader in search technology with its desktop searching software Personal Information Gateway, nicknamed iPIG.

Desktop searching is recognized as a promising technology, following on from traditional browser-based Internet searching.

The company released the first version of iPIG in February, ahead of all of its competitors, including Google, Yahoo! and Baidu.com, the world's largest Chinese-language search engine firm. The 3.0 version of iPIG was initially marketed in March.

Yet the company is said to have suffered huge losses, and there has been speculation that its parent company, Hong Kong-listed HC International Group, will sell it.

But Chen said: "There are losses indeed, which are unavoidable for dotcoms in an infancy stage... But fortunately we have never experienced 'huge' losses, as some counterparts did in their early days.

"Definitely there is nothing in the rumour that the business may be sold."

Despite suspicions and criticism of Zhongsou.com, Chen, who has been dedicated to search technology for more than a decade, said "we are quite confident we will increase our share while making profits very soon."

The company's revenues grew by a massive 400 per cent last year, compared to 2003.

Small firms could well become big players in the next stage of the Internet economy, as proved by the success stories of Google and Chinese firms such as Tencent and Shanda, Chen said.

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