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SOHU » Topics » Our first business line, Brand Advertising

This excerpt taken from the SOHU 8-K filed Feb 9, 2005.

Our first business line, Brand Advertising

 

Again, Q4 was a solid quarter, given that it is traditionally the second weakest advertising quarter of the year after Q1, which is the weakest quarter because it includes Chinese New Year holidays.

 

The outlook for online advertising in 2005 again is good, but we don’t expect the online ad market to grow at the same phenomenal rate as the previous two years. We see increasing competition in this sector, especially from vertical players. We expect the online ad market to grow round 30% in 2005 and Sohu to grow in line with the market. We expect about 15% of our growth to come from rate price increase and the other 15% from volume growth. The latter is based on wider industry developments as follows:

 

  •   In 2005 we expect the IT, dotcom and financial sectors to increase their online ad business with us because of the promising outlook in these sectors.

 

  •   At the same time, we believe online advertising for automobile, online games and mobile handsets to be weaker than last year because these sectors face a more challenging business environment in 2005.

 

  •   We have a positive outlook on real estate advertising in 2005. SOHU will benefit from this because our highly successful Focus website has rolled out into 5 other cities in the past year. We plan to expand our presence in more Chinese cities during 2005.

 

For an update on our second business line of Sponsored Search, I would like to give the floor to our Vice-president Jianjun Wang. Jianjun has led our Search Team for the past 8 years, when we started with our website classification in 1997. Jianjun?

 

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