BEIJING, CHINA, July 8, 2003 – SOHU.COM Inc. (Nasdaq: SOHU), China's leading online media, communications, commerce and mobile value-added services company, today reported the highlights of its financial results for the fiscal quarter ending June 30, 2003.

Financial Highlights for the second quarter 2003:
· US GAAP net income of US$7.5 million or US$ 0.19 per diluted share was a US$8.4 million improvement from the Q2 2002 net loss of US$870,000 or US$0.02 per diluted share. On a quarterly sequential basis SOHU grew net income by US$2.9 million over the first quarter’s net income of US$4.6 million.
· Revenues totalled US$19.3 million, a 216% increase from Q2 2002 revenues of US$6.1 million.
· 12th consecutive quarter of double-digit quarterly sequential revenue growth. Revenues grew by an all-time high of US$4.9 million, or 34%, from US$14.4 million reported for the first quarter of fiscal 2003.
· Advertising revenues reached US$6.8 million, up 100% from Q2 2002.
· Non-advertising revenues reached US$12.5 million, an increase of 346% from Q2 2002, through sustained conversion of SOHU’s user base into consumers.
· Gross margins reach record high of 68%.
· Operating profit margins of 38% in Q2 2003 demonstrate scalability of the business model.

Previously, the Company estimated revenues to be between US$14.6 million and US$16.0 million, with advertising revenues of US$4.6 million to US$5.2 million and non-advertising revenues of US$10.0 million to US$10.8 million. Second quarter net income was previously estimated to be between US$4.6 and 5.0 million, or US GAAP earnings between US$0.12 and US$0.13 per diluted share.

“SOHU is very proud to report these better-than-guided results in the second quarter. All of our business lines grew at a rapid pace, underscoring how our diversified business model fared well even under unpredictable circumstances created by SARS. SOHU provides services to help people change the way they access information, communicate and interact socially, which has taken the usage of Internet and wireless services in China to a higher level,” said Charles Zhang, Chairman and CEO of SOHU.

SOHU will report the full second quarter financial results on July 22, 2003 after the close of the Nasdaq market.

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 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 possible future losses, limited operating history, uncertain regulatory landscape in the People's Republic of China, fluctuations in quarterly operating results, and the company's reliance on online advertising sales, e-subscriptions (most of which are collected from a few telecom operators) and e-commerce for its revenues. Further information regarding these and other risks is included in SOHU's Annual Report on Form 10K for the year ended December 31, 2002, Quarterly Report on Form 10Q for the quarter ended March 31, 2003 and other filings with the Securities and Exchange Commission.

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/