BEIJING, CHINA, October 24, 2003 - SOHU.COM Inc. (Nasdaq: SOHU), China's leading online media, communications, commerce and mobile value-added services company, today reported results for the third quarter ending September 30, 2003.

Business Highlights
Highlights for the third quarter 2003:
·Revenues rise 194% year-on-year to US$22.1 million
·13th consecutive quarter of double-digit quarterly sequential revenue growth
·Advertising revenues rise a record-high 138% year-on-year to US$8.7 million
·Non-advertising revenues grow 248% year-on-year to US$13.3 million through sustained conversion of SOHU's user base into consumers·Gross margins reach 69%
·Operating profit reaches US$9.2 million with operating profit margins of 42%

·Strong Q4 03 momentum with expected net income of US$9.5 million to US$11.2 million and earnings per diluted share of US$0.24 to US$0.28

"SOHU is very pleased to report these strong results in the third quarter. We have added yet another quarter to our longstanding track record of strong, diverse and balanced growth as we tap the revenue potential of various business lines. Among the key drivers of our success in this quarter were the growth in brand advertising and search/paid listing as well as our ongoing ability to have our users adopt a broadening variety of fee-based products and services into their daily lifestyle," said Charles Zhang, Chairman and CEO of SOHU.

Business Results
The third quarter's financial results reflect the solid foundation of the Company's sustainable and diversified business model: an expanding corporate online advertising base and a massive paying consumer base. During the third quarter SOHU's revenues were derived from a well-balanced 40%-60% mix of advertising and consumer business lines.

For the third quarter of 2003, SOHU's advertising revenue totaled US$8.7 million, a 138% year-on-year improvement well ahead of company guidance. Advertising revenues (consisting of online brand advertising and search/paid listing) accounted for 40% of total revenues in Q3 2003. Advertising revenue gross margins of 77% increased substantially from 60% in the same period a year ago, underscoring how online advertising has grown into a highly scaleable revenue stream.

"We are proud our team accomplished stellar growth in both online brand advertising for large corporate clients and paid listing/search services for thousands of small and medium enterprises. The market for online advertising, paid listing, search and other corporate marketing services is on the rise which offers SOHU, a leading mainstream new media and communications platform in China, opportunities for continued growth momentum," Victor Koo, COO of SOHU, explained.

For the third quarter of 2003 SOHU's non-advertising revenues, which are derived from consumer services, grew 248% year-on-year to US$13.3 million and contributed 60% of total revenues. Non-advertising revenue gross margins reached 63%. Q3 2003 non-advertising revenues consisted of US$12.6 million in e-subscriptions (most of which are from mobile short messaging) and US$0.7 million in e-commerce sales.

"We are confident of the opportunities in China for our wireless services, online games and e-commerce. As these business lines mature, we expect our consumer services to be engines of growth at different times. Our wireless services have been built on the strong foundation of our close cooperation with the mobile operators. We expect quarterly sequential e-subscriptions growth of 12% to 20% in the fourth quarter as SOHU launches new products and widens its reach among consumers. In addition, we will continue to invest in online games and e-commerce," commented Charles Zhang.

In the third quarter SOHU organized joint marketing events with popular NBA basketball player Yao Ming, who is now the Company's official spokesperson. A September 2003 survey by the Chinese Academy of Social Sciences ranked SOHU.COM the leading destination for search by a 28% margin over the second-ranked web site, reflecting the strong consumer brand awareness of SOHU's flagship product Directory Search.

At September 30, 2003, SOHU's cash and marketable debt securities balance was US$161.6 million.

During the third quarter SOHU recorded a non-recurring non-cash tax charge of $6.5 million, which will allow the Company to reduce its effective tax rate to under 10 % in the fourth quarter and to below 3% in 2004 and 2005, generating significant benefit for shareholders.

"Through consistent execution SOHU has strengthened its financial metrics with yet another quarter of double-digit sequential revenue growth and our fifth straight profitable quarter, providing a solid basis going forward, " Derek Palaschuk, SOHU's Chief Financial Officer, commented.

Business Outlook
SOHU estimates total revenues for the fourth quarter 2003 to be between US$24.3 million and US$25.7 million, with advertising revenues of US$9.4 million to US$9.6 million and non-advertising revenues of US$14.9 million to US$16.1 million. Fourth quarter net income is expected to be between US$9.5 million and US$11.2 million or US$0.24 to US$0.28 per diluted share.

"We are confident of our well-balanced, diversified business model's sustainable growth prospects as well as SOHU's ability to capture the benefits of the growing market in China," concluded Charles Zhang, Chairman and CEO of SOHU.COM.

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.

Conference Call
SOHU's management team will host a conference call at 8:30 PM EST, October 23, 2003 (8:30 AM on October 24, 2003 in the Hong Kong/China time zone) following the quarterly results announcement.
The conference call will be available on web cast live and replay at: http://www.sohu.com/about/English/conference.htm

Conference call dial-in details: TELEPHONE: from within U.S.A. at (1)773-756-4618; from Hong Kong at (852) 2258-4002; or from China at 10-800-852-0823 (toll free), PASSCODE: 7827815, LEADER: Caroline Straathof.

Instant replay dial-in numbers (available for 24 hours): TELEPHONE from within U.S.A: (1-402) 220-0229; or from Hong Kong at (852) 2802-5151; PASSCODE: 706700.

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/