Qihoo Drops to 1-Week Low After Saying Apple Cut Its Apps
Qihoo 360 Technology Co. Ltd. (QIHU) fell to the lowest level in more than a week in New York after the Chinese software company said that its applications were removed from Apple Inc. (AAPL)’s iTunes store and as it received an unfair competition warning.
American depositary receipts of Qihoo, owner of China’s most popular Web browser, slipped 1.5 percent to $31.5 in New York, the lowest close since Jan. 16. The stock earlier slid as much as 5.4 percent.
Qihoo’s apps were “abruptly removed” from the iTunes store last week for no apparent reason, Qihoo Chief Financial Officer Alex Xu said by e-mail today. Qihoo’s management was also called in to the Beijing Industrial and Commercial Administration Bureau and issued an executive warning that its use of anti-virus software in Internet browsers was considered unfair competition, according to a Jan. 24 posting on the watchdog’s microblog.
“Competition is intensifying,” Echo He, a senior analyst at Maxim Group LLC, which rates Qihoo buy, said by phone. “If the authorities call Qihoo to answer some questions then investors in the U.S. will think that’s serious.”
Beijing-based Qihoo told its users today that Baidu Inc., owner of China’s most-used search engine, is using a plug-in that can determine whether users are on Qihoo’s browser, Xu said in a separate e-mail. A pop-up window will warn users that the Qihoo browser is incompatible with Baidu’s system and “lure users to change browsers,” according to the e-mail.
Patricia Graue, a spokeswoman for Baidu based in San Francisco, declined to comment when contacted by phone.
Qihoo started offering a search engine in August, putting it in competition with Beijing-based Baidu. Baidu ADRs (BIDU) jumped 3.1 percent to $111.39 in New York.
Apple spokesman Tom Neumayr declined to comment on whether Qihoo’s apps had been removed from iTunes when contacted by phone. Qihoo doesn’t expect the incident to have any meaningful financial or operational impact and other Chinese companies have had similar treatment from Apple, the CFO said by e-mail.
To contact the reporter on this story: Victoria Stilwell in New York at email@example.com
To contact the editor responsible for this story: Emma O’Brien at firstname.lastname@example.org