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Qihoo 360: building a “free” business model

Sunny Li Sun (University of Missouri – Kansas City, Kansas City, Missouri, USA)
Yanli Zhang (Center for Enterprise Development and Innovation, Soochow University, Suzhou Jiangsu, China) (Department of Management, Montclair State University, Montclair, New Jersey, USA)

Publication date: 2 April 2015

Abstract

Synopsis

This case discusses Qihoo 360's free business model, how it used this free model to overpower competitors, and how the model evolved over time. Qihoo 360 is a company that took just six years to become a company listed on the New York Stock Exchange (with a market value of over US$ 2 billion). At Qihoo 360's Initial Public Offering (IPO) at the New York Stock Exchange (NYSE), Qihoo's founder Zhou Hongyi reflected on how Qihoo's free business model had brought its current success and speculates on its future challenges.

Research methodology

The authors used both secondary data and field interviews when preparing this case. After reading through various company reports, competitor information, and financial filings, the authors interviewed five top manager team (TMT) members of Qihoo 360, three TMT members of its competitors, and two partners of venture capital investors who have invested in these companies in Beijing or Shenzhen during the last three years. The authors collected 347 media reports related to these companies in Chinese covering seven years of history. This long span of data collection improves the interpretation of the company and helps construct the storyline of the case.

Relevant courses and levels

This case is suitable for an MBA course or an advanced undergraduate course in strategic management or a technology-oriented entrepreneurship course, focussing on the topic of the free business model, business model innovation, disruptive innovation, and evolution of the business model during the entrepreneurial process.

Keywords

Acknowledgements

The authors thank Gina Vega and two reviewers for editorial guidance. The authors also appreciate helpful comments from Marilyn L. Taylor, Vijaya Narapareddy, Daniel Degravel, and other seminar participants at AOM 2011 and USASBE conference 2012. This research was supported by Kemper Summer Research Grant, funded by the Bloch School of Management, University of Missouri-Kansas City

Citation

Li Sun, S. and Zhang, Y. (2015), "Qihoo 360: building a “free” business model", , Vol. 11 No. 2, pp. 163-174. https://doi.org/10.1108/TCJ-07-2014-0055

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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