This has left Baidu in a somewhat weakened state and it has increased the desire of its competitors to see it further weakened. After all, this is China. No one makes fat margins for long before about 100 copycats start showing up to try and get a piece of that action for themselves. Sohu has had its own search engine in Sogou for several years. It has been pretty steady with about a 10% market share in the space. That may not seem like a lot now but it would swing Qihoo to close to a quarter of the market. That's why Qihoo was seen as aggressively pursuing the stake. You also had Baidu reportedly in the hunt to keep that important share for itself.
Alibaba has been very active in the course of the last few months as it gets closer and closer to its IPO announcement. First it invested in Sina's ( SINA) Weibo service. Then it bought a minority stake in Chinese map company AutoNavi ( AMAP). Now, it seems probable that Alibaba is going to be moving into search. When the IPO filing happens for Alibaba -- of which Yahoo! ( YHOO) still holds a 24% stake -- investors could be very surprised by the power of this Chinese Internet conglomerate. At the time of publication the author was long YHOO, SOHU, QIHU, SINA and short BIDU. Follow @ericjackson This article was written by an independent contributor, separate from TheStreet's regular news coverage.