| BEIJING, CHINA, July 7, 2006 - Sohu.com Inc. (NASDAQ:
SOHU), China's leading online media, search and mobile value-added services
company, announced today that several of China’s mobile network operators
have introduced new polices on wireless value added services (“WVAS”)
affecting Service Providers (“SPs”) including Sohu.
New policies introduced by China Mobile (“CMCC”) include:
1. Extension of trial period and double reminders for new monthly subscriptions
(July implementation)
For all Monternet services (including SMS, MMS and WAP), CMCC will implement
a 10-42 day free trial period for new monthly subscriptions in addition
to sending two reminders: a first one at the time of service registration
and another at the end of the free trial period. Currently, CMCC sends
one reminder immediately after the subscription is ordered and the free
trial period is 3-11 days.
2. Billing reminders to existing monthly subscribers (August to September
implementation)
CMCC plans to gradually send one-time SMS reminders to existing SMS,
MMS and WAP monthly subscribers about their subscriptions and fees being
charged during August and September 2006.
3. Conversion of per message-based SMS subscriptions to monthly subscriptions
and positive user confirmations are required for the conversion (mid-June
implementation).
China Unicom also introduced polices to convert all per message-based
SMS subscriptions to monthly subscriptions, but positive user confirmations
are not required for conversion (July implementation).
Based on the above and absent any additional measures or changes in
policies and regulations, Sohu expects these new policies to reduce
Sohu’s wireless revenue by approximately US$1.5 million to US$2.5 million
per quarter for the third and fourth quarters of 2006. For the first
quarter of 2006, Sohu’s wireless revenues were $8.0 million, representing
approximately 26% of our total revenue with a gross profit margin of
52%. Sohu believes China Mobile’s new policies are aimed at creating
a more regulated industry environment to lower customer complaints and
increase user satisfaction. Although user subscriptions will likely
be affected in the near term, the industry’s overall development should
benefit in the longer term.
About Sohu.com
Sohu.com Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable
to the daily life of millions of Chinese, providing a network of web
properties and community based/web 2.0 products which offer the vast
Sohu user community a broad array of choices regarding information,
entertainment and communication. 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; #1 online alumni club www.chinaren.com;
#1 games information portal www.17173.com; the top real estate website
www.focus.cn; wireless value-added services provider www.goodfeel.com.cn;
and leading online mapping service provider www.go2map.com.
Sohu corporate services consist of brand advertising on its matrix
of websites as well as paid listing and bid listing on its in-house
developed search directory and engines. Sohu also offers two types of
consumer services. Sohu offers wireless value-added services such as
news, information, music, ringtone and picture content sent over mobile
phones. The company also operates two massively multi-player online
role-playing games as well as a casual game platform. Sohu.com, established
by Dr. Charles Zhang, one of China's Internet pioneers, is in its tenth
year of operation.
Safe Harbor Statement
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, the uncertain
regulatory landscape in the People's Republic of China, fluctuations
in Sohu's quarterly operating results, Sohu's historical and possible
future losses and limited operating history, and the company's reliance
on online advertising sales, wireless services (most wireless revenues
are collected from a few mobile telecom operators), and online games
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, 2005, Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006, and other filings with the Securities and Exchange Commission.
Sohu.com Contact Information
Jessica Zhang
Senior Manager
Investor Relations and Corporate Communications
Tel: +86 10 6272 6596
E-mail: ir@contact.sohu.com
http://corp.sohu.com
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