Double Digit Revenue Growth; Pro Forma Net Loss Narrowed by 10%; Enters Online Securities Trading

BEIJING, CHINA, April 23, 2002 - SOHU.COM (Nasdaq: SOHU), China's leading online media, communications and commerce company, today reported results for the first quarter ended March 31, 2002.

Business Highlights
· Another record quarter with revenues of US$4.5 million, up 10% quarter-to-quarter and 85% year-on-year, beating company guidance

· Pro forma net loss narrowed to US$2.2 million, a 10% sequential and 47% year-on-year improvement, ahead of company guidance

· A solid 26% sequential increase in non-advertising revenues fueled by monetization of SOHU's consumers through e-subscriptions and e-commerce, reaching 45% of total revenues

· Registered users total 52.6 million with 9.6 million added during the quarter

· Company maintains positive pro forma EBITDA guidance for Q4 2002

· Online securities trading services to commence in Q3 2002 through SOHUstock.com

" For the 7th consecutive quarter SOHU delivered double digit revenue growth, proving that our business model of diversified revenue from online advertising and consumer business is a sustainable growth strategy. With a flying start in the first quarter, SOHU is firmly on course to achieve our goal of becoming cash flow positive from operations in Q4 of 2002," commented Charles Zhang, CEO and President of SOHU.COM.

SOHU reported record revenues of US$4.5 million for its first quarter ended March 31, 2002, a quarterly sequential increase of 10% over the US$4.1 million booked in Q4 2001. Gross margins were maintained at 36%. Pro forma and US GAAP net loss totaled US$2.2 million or US$0.06 per share for the first quarter 2002.

Business Results
With 55% of revenues from advertising and 45% from consumer business in the first quarter, SOHU is quickly realizing its goal of building a sustainable and diversified business model on two strong pillars: a steadfast home-market client base and a massive, paying user population.

For the first quarter of 2002, SOHU's advertising revenue at US$2.5 million were equal to the fourth quarter of 2001 with advertising revenue gross margins remaining unchanged sequentially at 42%. Domestic advertising clients provided an all-time high 81% share of advertising revenue. They included leading companies such as IT firms TCL and Great Wall Computer, Industrial and Commercial Bank Beijing Branch, and fast-moving consumer goods companies Kang Shifu and Wahaha. International companies accounted for 19% of ad revenues, among them Samsung, Acer, Motorola and Fiat.

" SOHU is leading the market in educating Chinese companies about the value of online advertising. Our long-term efforts aimed at Chinese clients are bringing evident results as more domestic companies use the Internet. They clearly constitute the largest clientele for online advertising products. Again this quarter, we were able to win new Chinese companies over to our creative online marketing campaigns. Moreover, given the traditionally short first quarter due to the Chinese New Year holidays, our ad performance is particularly solid. The World Cup of soccer in Korea/Japan will surely boost ad revenue in the second quarter," said Victor Koo, COO of SOHU.COM.

During the quarter, the Company launched SOHU.NET, a platform of bundled marketing services for small and medium sized enterprises (SME) that represent a new segment of corporate clients in a highly scalable business. SOHU.net provides SME clients cost-effective and efficient ways to conduct business online, market their product and reach targeted audiences. SOHU.net services include SOHU yellow pages, paid listings, classified ads, domain name registration, web hosting service, website construction and corporate email.

SOHU's business strategy of monetizing its vast user base has paid off, with consumer services contributing 45% of total revenues in Q1 2002. The consumer business, consisting of e-subscriptions (short messaging and premium services) and e-commerce, has become a sustainable and recurring source of revenue, growing 26% from the prior quarter's US$1.6 million to US$2.0 million in Q1 2002. Substantially all non-advertising revenues are derived from e-subscription and e-commerce services.

"In the past year SOHU's consumer business was proven. It now represents nearly half of total revenues and is the fastest growing segment of our corporate business. The market for online consumer services has reached critical mass with the online population topping 56 million, according to Nielsen/Netratings. This year we will apply our success in e-subscriptions and e-commerce to other areas of the consumer business, among them online securities trading," explained Charles Zhang.

SOHU remains committed to profitability through revenue growth and controlled spending. Q1 2002 pro forma operating expenses of US$4.1 million represent a 5% improvement over US$4.3 million in Q4 2001.

Year-on-year, SOHU increased revenues by 85% and multiplied the number of registered users threefold to 53 million while reducing sales and marketing expenses by 18% -- further evidence of SOHU's successful monetization strategy of expanding the business at no incremental cost.

The Q1 2002 pro forma net loss was reduced 10% sequentially from Q4 to US$2.2 million, which represented a 47% year-on-year improvement from a pro forma net loss of 4.2 million in Q1 of 2001. Pro forma EBITDA (Earnings before interest, tax, depreciation and amortization) for Q1 2002 narrowed to negative US$1.3 million, a 19% improvement over negative US$1.6 million for Q4 of last year.

As of March 31, 2002, SOHU's cash and marketable debt securities balance was US$43.5 million.

"Our financial results are proof of yet another quarter of excellent management execution that enables us to maintain an unstoppable momentum. SOHU is moving towards pro forma EBITDA break-even in Q4 of this year through continued and consistent delivery of sound operating results according to plan," explained Derek Palaschuk, Chief Financial Officer of SOHU.COM.

Strategic Initiatives
SOHU's strategic initiatives for 2002 aim to further expand the consumer business that the Company developed successfully in 2001.

SOHU has formed a joint venture with Guolian Securities Ltd. to provide online securities trading services and other value-added financial services. The joint venture (JV), named SOHU - Guolian Information Technology Co., has a registered capital of US$ 6.0 million with SOHU owning 51% of the JV. SOHU and Guolian Securities manage the JV jointly. Guolian Securities Ltd. has outstanding financial management and risk control, as evidenced by its No. 6 national ranking in 2001 in terms of rate of return on shareholder equity, according to Shanghai Securities Exchange statistics. Joint venture operations have already started and online securities trading services will be available on the web site SOHUStock.com in the third quarter of this year.

The tremendous market potential of online stock trading in China is evident. Investors had opened 3.3 million online trade accounts by the end of last year, nearly 10 per cent of the average number of accounts opened on the Shanghai and Shenzhen stock exchanges last year, according to the China Regulatory Securities Commission. The global technology consultancy IDC expects China to boast 21 million online accounts by 2005, the largest number of online stock traders in Asia.

"Online securities trading is the logical next step in our consumer business strategy. Our core assets are our 53 million registered users and their trust in the SOHU brand. Our users have become our customers in the past year, paying for SOHU short messaging and other premium services and buying goods at SOHU E-store. We have a compelling track record of success. Our timely assessments and agility in grasping opportunities are tested and demonstrated," said Charles Zhang.

Business Outlook
SOHU is confident that it can sustain its momentum of continued revenue growth and controlled spending to achieve positive pro forma EBITDA by Q4 2002, and full year pro forma profitability in fiscal 2003. As such, SOHU provides the following guidance for the second quarter of 2002.

SOHU expects total revenues for Q2 2002 to be US$5.1 million, with advertising revenues of US$2.8 million and non-advertising revenues of US$2.3 million. Gross margins in Q2 2002 are estimated to be similar to Q1 2002. Pro forma EBITDA for the second quarter is expected to be not more than negative US$1.1 million. Second quarter pro forma net loss is estimated to be not more than US$2.0 million ($0.06 per share). Second quarter capital expenditures are expected to be US$1.4 million.

"We are clearly on the path to profitability. SOHU is committed to maintaining its current strategic direction in a predictable and visible manner. We believe that we have the edge over the competition not only in our brand and user base leadership, but also in our financial discipline and commitment to profitability," commented Charles Zhang.

Safe Harbor Statement
This company's announcement contains forward-looking statements. It is currently expected the Business Outlook will not be updated until the release of SOHU's next quarterly earnings announcement; however, SOHU reserves the right to update its Business Outlook at any time for any reason. We may also make written or oral forward-looking statements in our periodic reports to the Securities and Exchange commission on forms 10-K, 10-Q, 8-K, etc., in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, SOHU's historical and future losses, limited operating history, uncertain regulatory landscape in the People's Republic of China, fluctuations in quarterly operating results, the company's reliance on online advertising sales for a significant portion of its revenues. Further information regarding these and other risks is included in SOHU's prospectus, 10K, 10Q and in its other filings with the Securities and Exchange Commission.

Pro forma Results
Pro forma results, which generally exclude non-operational, non-cash charges and benefits as well as one-time cash or non-cash charges, are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States (known as "GAAP"). A reconciliation of GAAP to pro forma is included in the financial statements.

SOHU management measures the progress of the business using pro forma results, which exclude the following line items on the Company's statement of operations:
a) Amortization of goodwill arising on acquisitions
b) Accretion on mandatorily redeemable convertible preferred stock
c) Investment write-downs
d) Stock-based compensation
e) Other gains (losses), net
f) Equity in losses of equity-method investees, net
g) Cumulative effect of change in accounting principle Conference

Call
Live web cast of Q1 conference call on April 23, 2002 , at 9:30 AM Hong Kong time (or 9:30 PM EST on April 22) will be broadcast at:

http://www.sohu.com/about/English/conference.htm

Conference call dial-in details: TELEPHONE: (852) 2258-4002 or from within U.S.A.: (1-800) 365-8460, PASSCODE: China, LEADER: Caroline Straathof.

About SOHU.com
SOHU.com is the leading Internet portal in Mainland China with current daily page views exceeding 12 million. It provides navigation/search, news, sports, business and finance, real estate channel, entertainment, chat, email and e-commerce activities for a solid and wide base of visitors. Dr. Charles Zhang founded SOHU.com in 1997. Its investors include Intel, Dow Jones, IDG, the Morningside China Group, PCCW, Legend and Hikari. Its content partners include CNET, DOW Jones and dozens of local media organizations in China.

For further information:
Dahlia Wei
SOHU Investor Relations and Communications
Tel: +86 10 6272 6598
E-mail: ir@sohu-inc.com
http://www.sohu.com/about/English/