"We are pleased to report these first quarter results. Despite seasonal weakness in online advertising due to the Chinese New Year holidays in February, advertising and sponsored search sales performed strongly relative to our expectations. Wireless business has turned the corner with quarterly sequential revenue growth exceeding our expectations, indicating that we have left last year's transitional and regulatory issues behind us. As a result, we believe SOHU's first quarter results put us on firm ground for a good business year. I am particularly pleased to note that quarter-on-quarter sponsored search revenue achieved some growth while search traffic doubled," said Charles Zhang, Chairman and CEO of SOHU.

Business Results
Revenues for the first quarter ended March 31, 2005 totaled US$23.73 million, compared to revenues of US$24.07 million for the fourth quarter ended December 31, 2004, and US$25.94 million for the first quarter ended March 31, 2004. Gross margin of 68% in Q1 2005 was unchanged from the previous quarter and slightly up from 67% in Q1 2004. Net income for the first quarter of 2005 was US$5.71 million or US$0.15 per fully diluted share. This compares to net income of US$6.50 million or US$0.17 per fully diluted share for the fourth quarter of 2004 and US$10.93 million or US$0.27 per fully diluted share for the first quarter of 2004.

SOHU's advertising revenue for the first quarter of 2005 totaled US$14.86 million, a 35% year-on-year improvement and 6% decline quarter-on-quarter. Advertising revenue, consisting of US$12.13 million in brand advertising and US$2.73 million in sponsored search, accounted for 63% of total revenues in the first quarter of 2005. Advertising gross margin was 76%, compared to 80% in Q4 2004 and 75% in Q1 2004.

For the first quarter of 2005 SOHU's non-advertising revenue, which are derived from wireless value-added services, online games and e-commerce, decreased by 41% year-on-year but increased 8% quarter-on-quarter to US$8.87 million, representing 37% of total revenues. The year-on-year decline was predominantly caused by the loss in wireless revenue, which went down by 51% year-on-year, while the quarterly sequential increase was similarly due to the resumption of growth in wireless revenue. Non-advertising gross margin was 55% compared to 45% in Q4 2004 and 61% in Q1 2004.

The martial arts fighting game Blade Online, in commercial operation since October 17, 2004, generated revenue in line with company expectations. Together with Knight Online, SOHU's first online game, the two multi-player online role-playing games represented 6% of overall revenues in the first quarter.

For the first quarter of 2005, SOHU's operating expenses totaled US$10.74 million, an increase of 4% quarter-on-quarter and 59% year-on-year. Operating profit margin of 23% was down from 25% in Q4 2004 and 41% in the same period last year. The year-on-year increase in operating expenses is mostly due to investment in long-term growth opportunities, the rise in sales and marketing spending, and the consolidation of operating expenses from the wireless services provider Goodfeel that SOHU acquired in mid-2004.

In February 2005 SOHU repurchased 885,605 shares of common stock, thereby completing a ten months old stock repurchase program with an accumulated stock buy-back of 6% of the total shares outstanding.
In April 2005, SOHU signed a definitive agreement to acquire Go2Map, one of the leading online mapping service providers in China. The acquisition will enable SOHU to apply Go2Map's rich technological expertise in professional location-based information to SOHU's search engine capabilities as well as online website content.

"We believe both the stock repurchase program and the acquisition of Go2Map have been attractive investments for the company. We will continue to look into strategic opportunities to leverage the Company's organic growth and drive long-term shareholder value," Carol Yu, SOHU's Chief Financial Officer, said.

At March 31, 2005, SOHU's cash and marketable debt securities balance was US$128.7 million.

Business Outlook
SOHU estimates total revenues for the second quarter 2005 to be between US$25.0 million and US$26.0 million, with advertising revenue of US$16.5 million to US$17.0 million and non-advertising revenues of US$8.5 million to US$9.0 million. Second quarter earnings per fully diluted share are expected to be between US$0.17 and US$0.19.

Note to the Financial Information
The financial information in this press release are extracted from financial statements prepared in accordance with generally accepted accounting principles in the United States.

Safe Harbor Statement
This 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.

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, wireless services (most wireless revenues are collected from a few mobile telecom operators), online games and e-commerce for its revenues. Further information regarding these and other risks is included in SOHU's annual report on Form 10-K for the year ended December 31, 2004, and other filings with the Securities and Exchange Commission.

Conference Call
SOHU's management team will host a conference call at 9:00 PM EST, April 27, 2005 (or 9:00 AM on April 28, 2005 in the Beijing/Hong Kong time zone) following the quarterly results announcement.

To listen to the conference call, please use the dial in numbers below:

CHINA (NORTH) Toll Free Number: 10800-852-0824
CHINA (SOUTH) Toll Free Number: 10800-152-0824
HONG KONG Toll Number: +852-2258-4102
USA Toll Number: +1-210-795-0495
PASSCODE: 7840490

The conference call will be available on web cast live and replayed at: http://www.sohu.com/about/English/conference.htm

About SOHU
SOHU.COM Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable to the daily life of millions of Chinese who use the portal network for their news, search, e-mail, wireless messaging, instant messaging, browsing, games and shopping. SOHU has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; the #1 online alumni club www.chinaren.com; #1 games information portal www.17173.com; top real estate website www.focus.cn; and wireless value-added services provider www.goodfeel.com.cn. This network of web properties offers the vast SOHU user community very broad choices regarding information, entertainment, communication and commerce.
SOHU corporate services consist of online advertising on its matrix of websites as well as paid listing and bidding listing on its in-house developed search directory and engine. SOHU also offers three types of consumer services. SOHU offers wireless value-added services such as news, information, ringtone and picture content sent over mobile phones. The company also operates two massively multi-player online role-playing games and manages a business-to-consumer e-commerce platform.
SOHU.COM, established by Dr. Charles Zhang, one of China's Internet pioneers, is in its ninth year of operation.

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/