This excerpt taken from the SOHU 10-K filed Mar 8, 2007.
Pro Forma Information under SFAS 123 for Prior Periods
The following table illustrates the effect on net income and net income per share if the Company had applied the fair value recognition provisions of SFAS No.123 to stock-based employee compensation for the years ended December 31, 2005 and 2004 (in thousands except per share data):
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. For the years ended December 31, 2005 and 2004, the fair value of options granted was estimated with the following assumptions: