Sohu's business model consists of brand advertising and sponsored search targeting corporate clients, as well as online games targeting individual consumers, and wireless valued added services.
On the corporate side of the business:

Brand Advertising

Corporate clients are maximizing the marketing power on the Sohu matrix of web properties through online brand advertising and sponsored search products. In brand advertising Sohu enjoys a strong competitive advantage as one of the top portals in China. Our media platform is one of the most influential mainstream online media and our growing client base and revenues are testament to that.

Sponsored Search

Sohu also includes revenues from sponsored search in advertising revenues. Its sponsored search is aimed at small and medium sized enterprises that pay fees to list on our search results or in our directory. Sohu.com generates sponsored search revenues from both a fixed fee model of paid-listing and a pay-for-click model of bid-listing services.

Sohu’s all-inclusive, proprietary search engine, Sogou (which means ‘Search Dog’ in Chinese) was initially launched in August 2004 and has continued to invest in research and development. With a search database of 10 billion retrieved Chinese web pages and a daily update of 500 million pages, we believe Sogou is one of the best Chinese search engines. We monetize our search through sponsored search listings, and we expect the market for sponsored search to have a long-term growth potential with the development of e-commerce, which is still at a very early stage in China.

On the consumer side of the business:

Online Games

The Company operates two multiplayer online games - Blade Online and Tian Long Ba Bu. Blade Online was co-developed with a Beijing-based game studio and launched in 2004. Tian Long Ba Bu was a self-developed game and launched in 2007.

In addition to MMORPG game, the company also seeks opportunities in casual games. We believe the market for online games is in an early stage, therefore giving Sohu a viable opportunity to succeed. We are committed to online games for the long term and we are encouraged by this incremental progress.

Wireless

Sohu operates as a service provider to China's leading mobile operators, offering a wide range of wireless products focused on entertainment, media and communications. The Company makes these products available to users via a broad choice of technologies, such as short messaging services (SMS), multimedia messaging services (MMS), wireless application protocol (WAP), interactive voice response (IVR), and ring back tone (RBT) services. The Company provides wireless services through several Chinese mobile and telecom network operators.

As more interactive wireless technology takes hold, we believe our core portal identity gives us a distinct advantage over the large number of less diversified competitors in this field because we can develop new value-added services adapted from our comprehensive online content and large user communities. Therefore we expect wireless value-added services to offer an attractive long-term market opportunity for Sohu.