Sohu.com (SOHU)

Online Games

We engage in the development, operation and licensing of our online games. We currently operate two MMORPGs, TLBB, which we developed in house, and BO, which we licensed from a third party. TLBB, which has been one of the most popular online games in China for 2007 according to International Data Corporation, is our first in-house developed MMORPG. For the three months ended December 31, 2008, we had approximately 1.8 million active paying accounts for TLBB and approximately 159,000 active paying accounts for BO.

We operate our current games under the item-based revenue model, meaning game players can play our games for free, but may choose to pay for virtual items to enhance the game-playing experience. Game players purchase prepaid game cards or game points, which are used to purchase virtual items. We sell our prepaid game cards to approximately 100 regional distributors throughout China, who in turn sub-distribute them to numerous retail outlets, including Internet cafés and various websites, news stands, software stores, book stores and retail stores.

We continually collect feedback from our game players through multiple channels. Our product development team and our game operations team work closely together, allowing us to translate game player feedback into game updates and expansion packs in a timely manner. We typically produce expansion packs, which contain significant upgrades, every few months, and update our games on a weekly basis with interim enhancements. We believe that such expansion packs and regular updates improve the game-playing experience and help to maintain the interest level of players, thereby helping us to extend the lifespan of our games.

Online Games

In 2006, we operated two multiplayer online role playing games (MMORPG games), namely, Knight Online and Blade Online. The former was licensed from a Korean developer and launched in 2003. The latter was co-developed with a Beijing-based game studio and launched in 2004. In addition to MMORPG games, we also operate a casual game platform on our portal, mainly consisting of self-developed chess and board games. Our online games revenues have been included within our other non-advertising revenues and are a relatively small part of our business. In November 2006, we terminated the operation of Knight Online when the license contract expired. We will maintain servers for Knight Online until March 20, 2007. In December 2006, we announced the launch of Blade Hero Online, which is the upgraded version of Blade Online. Blade Hero Online was offered on a free-to-play basis and we sell virtual products in the game to generate income.

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Online Games

We currently operate two multiplayer online role playing games (MMORPG games), namely, Knight Online and Blade Online. The former was licensed from a Korean developer and launched in 2003. The latter was co-developed with a Beijing-based game studio and launched in 2004. In addition to MMORPG games, we also operate a casual game platform on our portal, mainly consisting of self-developed chess and board games. Our online games revenues have been included within our other non-advertising revenues and are a relatively small part of our business. In October 2005, we started to offer our Knight Online free of charge with virtual products offered to users to generate income.

Online Games

We operate two multiplayer online games, Knight Online, which we licensed from a Korean Developer and launched in 2003, and Blade Online, which we co-developed with a Beijing based game studio and launched in 2004. Our online game revenues in 2004 have been included within our other non-advertising revenues and are a relatively small part of our business.