The study analyzed the business model of two selected Chinese AV-vendors, Qihoo 360 and Baidu, from the perspective of their product development model, revenue model, marketing and distribution, and services and implementation. Furthermore, market research was conducted to compare the Chinese and Western users in order to investigate the influential factors on users' choice of security software. This study was initiated for the purpose of investigating the business model which supports Chinese "free" AV-vendors to offer free fully-functional security software.