Sohu.com (SOHU)

E-commerce

We started the e-commerce portion of our business in 2000, selling products at store.sohu.com. We made direct sales to customers (the B2C model). Under the B2C model, we purchased products from suppliers, stocked the goods in our warehouse, and, upon receiving orders from customers through our Websites, arranged for delivery. In 2005, we implemented an additional business model - the n2N model. Under the n2N model, suppliers list their products on our Website and receive orders directly from customers through the Website. On June 20, 2006, we discontinued the e-commerce platform of physical consumer goods in order to focus on profitable segments.

E-commerce

We started the e-commerce portion of our business in 2000, selling products at store.sohu.com. We made direct sales to customers (the B2C model). Under the B2C model, we purchased products from suppliers, stocked the goods in our warehouse, and, upon receiving orders from customers through our Websites arranged for delivery. In 2005, we implemented an additional business model, n2N model. Under the n2N model, suppliers list their products on our Website, and receive orders directly from customers through the Website. We do not keep any inventory. Currently, the consumer products listed on our Website consist of various categories, such as books, music disks, videos, health care products, cosmetics, gifts, apparel and accessories. We are now in the process of converting our remaining e-commerce businesses under B2C model to n2N model.

E-commerce

On store.sohu.com we undertake fulfillment e-commerce activities and conduct e-commerce transactions. Our e-commerce products consist of over 27,700 consumer products such as videos, compact discs, books, health care products, cosmetics, and computer equipment. We purchase products from suppliers, stock the goods in our warehouse and, upon receiving the orders from users through our Websites, arrange for delivery to our customers all over China. Fulfillment is provided by delivery companies or through postal services. Substantially all sales are made on a cash on delivery basis. Our e-commerce revenues are earned primarily from sales of consumer products through Sohu’s Website.

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