News and Research on Sohu.com, Inc. (SOHU)
Business Description
Sohu.com, Inc., a premier Internet media company, provides daily source of information, entertainment and communication for Chinese consumers. The company offers wireless value-added services such as news, information, music, ringtone and picture content sent over mobile phones. It also operates a massive multi-player online role-playing game and a casual game platform.
In November 2006, the company acquired 21 East HK and its subsidiary 21 East Beijing, an entertainment provider in China.
The company’s operations are conducted through its indirect wholly owned PRC subsidiaries, Sohu Era, Sohu Software, Go2Map Software, Sogou Technology and Sohu Media and its entities, High Century, Sohu Entertainment, Sohu Internet, Goodfeel, Huohu, Tu Xing Tian Xia, Feng Yang Tian Lang, Sogou Information, Guangzhou Interactive and 21 East Beijing.
Mass Portal - Sohu.com
Sohu.com’s portal comprises Chinese language Web navigational capabilities, 31 main content channels, Web-based communications and community services and short messaging services. Its interest-specific main channels contain multi-level sub-channels that cover a range of topics, including news, business, entertainment and sports. It also offers free Web-based e-mail services. Its e-mail service is registered for its chat, bulletin board and other services.
Proprietary Search Engine - Sogou.com
Sogou is the company’s proprietary search engine. Sogou performs interactive searches of billions of Web pages using advanced algorithms.
Vertical Sites
Chinaren.com: ChinaRen is an online youth community in China, with approximately 77 million registered users as of December 2006. ChinaRen has leveraged a critical mass of loyal users to create on-line alumni networks in China.
17173.com: The Sohu games portal www.17173.com is an online destination for game players seeking information on games and feedback from other players on the site’s message boards. 17173.com is an online games information and community Website in China.
Focus.cn: Focus.cn attracts various users who are homeowners with high incomes and real estate professionals. The Focus.cn platform serves as a basis for regional expansion in other key urban areas where Internet penetration is highest in China.
Goodfeel.com.cn: Goodfeel is a WAP service provider in China, offering various WAP services including ring tone and picture download.
Go2Map.com: Go2Map is an online mapping services provider in China. Go2Map mapping information platform enables online mapping services through different Internet/Intranet platforms, mobile phones, call centers and PDAs. Go2Map’s database covers points of interests in approximately 307 cities across China, which has enabled it to develop multiple business applications, including sales of software and map information resources. Go2Map also provides Web surfers a free online mapping inquiry system in major Chinese cities.
Products and Services for Businesses
Brand Advertising
The company provides brand advertising services across its matrices of Web properties. Its offerings enable advertisers to post their advertisements in different forms, including textual, rich media and graphic advertisements, and in different locations on the Sohu matrix of Web properties. Its brand advertising products include banners, links, logos, buttons and stream advertisements placed on its Websites and sponsorships that typically focus on a particular event or a particular Website area. Its customers include multinational companies that have significant operations in Chinese markets, Fortune 500 companies, as well as Chinese domestic companies.
Sponsored Search
The company offers a series of sponsored search offerings, targeting at small and medium sized enterprises that pay fees to list on its search results, in its directory. Through its sponsored search services, the company provides advertisers a simple way to deliver advertisement to targeted customers by displaying advertisements in response to user actions, such as a keyword search. It offers paid listing and bid listing on its search engine and online directory, as well as listings in its classified advertisement section.
Products and Services for Users
The company provides products and services to its users through its Web properties, including aggregated content, communication and community, search and directory, wireless services and online games.
Aggregated Content
The company is an aggregator of content, and provides content on various topics. The company organizes its content around 31 main channels on the Sohu portal. Each main channel contains sub-channels and features news, commentaries and various utilities and solutions relating to a specific topic. It also has regional Websites in four different cities in China. As of December 31, 2006, the company had approximately 1500 content partners, which enables it to provide a range of content offerings. The company has established exclusive partnership/sponsorships with the Beijing 2008 Olympic Games, NBA, Team China Football, Team China Basketball, the fifteenth Asian Games and the sixth Inner City Games of PRC.
News: This section delivers local, national and international news from newspapers, magazines and other information providers throughout China.
Entertainment: This section contains entertainment arenas that are of interest to Chinese users, including movies, television programs, plays, operas and classical music.
Sports: This section provides the latest in national and international sports headlines, results, commentaries and analyses as well as exclusive contents obtained from exclusive partners, such as NBA, Team China Football and Team China Basketball.
Business and Finance: This section features business and financial news provided by financial information services in China covering both domestic and international markets. Users can retrieve real-time stock quotes, exchange rates, annual reports, research reports and other information on selected listed companies in China.
Automobile: This section includes industry forums, industry policies and trends, and online communications with the CEOs of the top Chinese automakers. Also provides automobile features, news, and product previews.
Real Estate: Together with Focus.cn, this channel offers directories of apartment, residential housing and commercial housing listings in nine major cities in China, and publishes advice and information on general real estate and home furnishing matters.
Information Technology: This section includes industry forums, industry policies and trends, and online communications with the CEOs of the top Chinese companies in the information technology industry. It features information technology news, product reviews and software downloads.
Women: This section covers a range of lifestyle-related topics that are of particular interest to Chinese women, including fashion and trends, beauty, society, emotion and other areas.
Online Video – V.Sohu.com and S.Sohu.com
The company has focused on developing new media technologies. It has two online TV-like channels, V.Sohu for entertainment and S.Sohu for sports, specifically geared for video content. In addition to watching pre-set programs with broadcasting schedules, users can also enjoy programs on an on-demand basis.
Communication and Community Tools
The company offers various communication and community tools for its Chinese online users that are important in promoting user affinity to its portal network.
Alumni Club: Alumni Club is a database service containing information on schools, classes and classmates that allows classmates to communicate and find each other.
Blogs: Blogs in an interactive platform for users to build their own space by posting their articles and pictures, and allow sharing of information amongst users.
E-Mail: The company offers e-mail services to its users with up to two-gigabyte free memory.
Picture Gallery: The company offers users to post their favorite pictures and allows interaction with other users. It organizes the collected pictures in categories and offers searching function to users for locating different pictures.
Message Boards: Users can post and exchange information on message boards covering 16 main topics, ranging from education and travel to fashion, sports and all news web pages.
Search and Directory Services
The company provides both keyword search services and search directory services to its users. Under the keyword search, the end users type in the keyword in the search box on the Website, and a list of Website links related to the searched keyword would be shown as search results. The search directory is structured as a search engine by categories. The end users can choose the search type from the nine categories and are linked to the corresponding Websites to continue the search process.
Web Page Search: The company’s Web Page Search provides users a better experience by increasing updating speed and higher relevancy for search results.
Music Search: Music Search enables people to easily find music, songs, lyrics, ring tones and other multimedia files on the Internet. The users can also sort its Music Search links by various categories, such as lists of top pop songs and singers, which are updated automatically every week based on the number of clicks.
News Search: The company’s News Search gathers information from approximately 2,000 sources, provides links to local, national and international news.
Say Board: The company’s Say Board provides users with a query-based searchable community to exchange views and share knowledge and experiences. Users can search, read and browse Internet message boards and post messages.
Picture Search: Picture Search enables users a convenient method to search for relevant pictures by keywords.
Map Search: With advanced technology, the company’s Map Search helps users search for maps, get directions, and find locations quickly and easily within China.
Wireless Services
The company operates as a service provider to China’s mobile network operators, offering a range of wireless products focused on entertainment, information and communications. These products are available to end users via a choice of technologies, such as SMS, WAP, MMS, RBT and IVR services. It provides wireless services pursuant to its cooperation arrangements with all of the four Chinese mobile network operators and their provincial subsidiaries.
The company offers various products and services to its users by utilizing the content of its portals to create fee-based services. Users can purchase its wireless services through its Websites or through mobile phones and pay for such services on a monthly subscription basis or per-message basis. Users may subscribe to receive news, alerts and other information, download ring tones and logos and alumni clubs, participate in dating and friends matching as well as play games, and order other mobile related content.
Online Games
The company operates a multiplayer online role playing game (MMORPG game), Blade Online. In addition to MMORPG games, the company also operates a casual game platform on its portal, mainly consisting of self-developed chess and board games. In December 2006, the company launched Blade Hero Online, which is the upgraded version of Blade Online.
E-commerce
The company started the e-commerce portion of its business, selling products at store.sohu.com. It made direct sales to customers (the B2C model). Under the B2C model, the company purchased products from suppliers, stocked the goods in its warehouse, and, upon receiving orders from customers through its Websites, arranged for delivery. The company implemented an additional business model - the n2N model. Under the n2N model, suppliers list their products on its Website and receive orders directly from customers through the Website.
Joint Venture
The company and Tsinghua University have set up a joint laboratory in Beijing, focusing on the research and development of search technique and other Internet technology. The laboratory is composed of 60 members with 35 coming from Tsinghua and 25 from Sohu. In order to prevent the lab from problems that other labs were haunted before, Sohu and Tsinghua also decide to establish a management committee. Sohu commits three years' investment in the lab and the first fund has been injected, but the company declines to tell concrete figures.
Competition
The company competes with various portals, including Sina, Tencent, Netease and Tom Online, and vertical sites, such as SouFun. Its search engine faces intense competition from software and other Internet products and services incorporating search and retrieval capabilities, such as Baidu, ZhongSou, Google and Yahoo! China.
The company also competes with pure-play services providers, such as, KongZhong and Linktone; operators of global Websites or Internet service providers, including Yahoo!, Microsoft/MSN and AOL; and other online games operators including Shanda and The9. It also competes with traditional forms of media, such as CCTV.com and XinHuaNet.
History
Sohu.com, Inc., was incorporated in 1996 as Internet Technologies China Incorporated, and changed its name to Sohu.com, Inc. in 1999.
