Sohu.com (SOHU)

14. Profit Appropriation

Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion.

Since Beijing Sohu Interactive Software Co., Ltd (“Sohu Software”), Go2Map Software (Beijing) Co., Ltd (“Go2Map Software”) and Beijing Sogou Technology Development Co., Ltd (“Sogou Technology”) under PRC GAAP, are either in an accumulated loss position or with loss in year of 2008, no appropriations have been made to the general reserve fund for the year ended December 31, 2008.

For the year ended December 31, 2005, Beijing Sohu New Era Information Technology Co., Ltd (“Sohu Era”) appropriated $1.7 million into the general reserve and the cumulative general reserve equal to 50% of its paid-in capital; therefore Sohu Era did not appropriate any additional reserve during 2006. In 2007, Sohu Era further made an appropriation of approximately $0.2 million due to its increased paid-in capital as a result of reinvestment. In 2008, since Sohu Era ended with a loss, no appropriation has been made to the general reserve fund for the year ended December 31, 2008. For the years ended December 31, 2008 and 2007, Beijing Sohu New Media Information Technology Co., Ltd (“Sohu Media”) made an appropriation of approximately $1.8 million and $3.8 million to the general reserve fund, respectively, which made the cumulative general reserve equal to 50% of its paid-in capital. For the year ended December 31, 2008, Beijing AmazGame Internet Technology Co., Ltd (“AmazGame”) and Beijing Gamease Age Digital Technology Co., Ltd (“Gamease”) made an appropriation of approximately $4.7 million and $0.6 million to the general reserve fund, respectively, which made the cumulative general reserve equal to 50% of their paid-in capitals. For the year ended December 31, 2007, AmazGame and Gamease, made an appropriation of approximately $0.3 million and $0.1 million to the general reserve fund, respectively. Upon certain regulatory approvals and subject to certain limitations, the general reserve fund can be used to offset prior year losses, if any, and could be converted into paid-in capital of Sohu Era, Sohu Media, Sogou Technology, AmazGame and Gamease for PRC GAAP and legal purposes. Other than the appropriations to the general reserve fund, the Company did not make any other appropriations for the years ended December 31, 2008 and 2007.

14. Profit Appropriation

Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make
appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare
fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s
discretion.

Since Beijing Sohu Interactive Software Co., Ltd (“Sohu Software”), Go2Map Software (Beijing) Co., Ltd (“Go2Map Software”)
and Beijing Sogou Technology Development Co., Ltd (“Sogou Technology”) under PRC GAAP, are either in an accumulated loss position or with loss in year of 2008, no appropriations have been made to the general reserve fund for the year ended
December 31, 2008.

For the year ended December 31, 2005, Beijing Sohu New Era Information Technology Co., Ltd (“Sohu Era”)
appropriated $1.7 million into the general reserve and the cumulative general reserve equal to 50% of its paid-in capital; therefore Sohu Era did not appropriate any additional reserve during 2006. In 2007, Sohu Era further made an appropriation of
approximately $0.2 million due to its increased paid-in capital as a result of reinvestment. In 2008, since Sohu Era ended with a loss, no appropriation has been made to the general reserve fund for the year ended December 31, 2008. For the
years ended December 31, 2008 and 2007, Beijing Sohu New Media Information Technology Co., Ltd (“Sohu Media”) made an appropriation of approximately $1.8 million and $3.8 million to the general reserve fund, respectively, which made
the cumulative general reserve equal to 50% of its paid-in capital. For the year ended December 31, 2008, Beijing AmazGame Internet Technology Co., Ltd (“AmazGame”) and Beijing Gamease Age Digital Technology Co., Ltd
(“Gamease”) made an appropriation of approximately $4.7 million and $0.6 million to the general reserve fund, respectively, which made the cumulative general reserve equal to 50% of their paid-in capitals. For the year ended
December 31, 2007, AmazGame and Gamease, made an appropriation of approximately $0.3 million and $0.1 million to the general reserve fund, respectively. Upon certain regulatory approvals and subject to certain limitations, the general reserve
fund can be used to offset prior year losses, if any, and could be converted into paid-in capital of Sohu Era, Sohu Media, Sogou Technology, AmazGame and Gamease for PRC GAAP and legal purposes. Other than the appropriations to the general reserve
fund, the Company did not make any other appropriations for the years ended December 31, 2008 and 2007.

14. Profit Appropriation

Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion.

Since Beijing Sohu Interactive Software Co., Ltd (“Sohu Software”), Go2Map Software (Beijing) Co., Ltd (“Go2Map Software”) and Beijing Sogou Technology Development Co., Ltd (“Sogou Technology”) under PRC GAAP, are either in an accumulated loss position or with loss in year of 2007, no appropriations have been made to the general reserve fund for the year ended December 31, 2007.

For the year ended December 31, 2005, Beijing Sohu New Era Information Technology Co., Ltd (“Sohu Era”) appropriated $1.7 million into the general reserve and the cumulative general reserve equal to 50% of its paid-in capital; therefore Sohu Era did not appropriate any additional reserve during 2006. In 2007, Sohu Era further made an appropriation of approximately $199,000 due to its increased paid-in capital as a result of reinvestment. For the year ended December 31, 2007, Beijing Sohu New Media Information Technology Co., Ltd (“Sohu Media”) and Beijing AmazGame Age Internet Technology Co., Ltd (“AmazGame Age”) made an appropriation of approximately $3.8 million and $1.1 million to the general reserve fund, respectively. Upon certain regulatory approvals and subject to certain limitations, the general reserve fund can be used to offset prior year losses, if any, and could be converted into paid-in capital of Sohu Era, Sohu Media, Sogou Technology and AmazGame Age for PRC GAAP and legal purposes. Other than the appropriations to the general reserve fund, the Company did not make any other appropriations for the years ended December 31, 2007 and 2006.

14. Profit Appropriation

SIZE="2">Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the
Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as
determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion.

SIZE="2">Since Beijing Sohu Interactive Software Co., Ltd (“Sohu Software”), Go2Map Software (Beijing) Co., Ltd (“Go2Map Software”) and Beijing Sogou Technology Development Co., Ltd (“Sogou Technology”) under PRC GAAP,
are either in an accumulated loss position or with loss in year of 2007, no appropriations have been made to the general reserve fund for the year ended December 31, 2007.

FACE="Times New Roman" SIZE="2">For the year ended December 31, 2005, Beijing Sohu New Era Information Technology Co., Ltd (“Sohu Era”) appropriated $1.7 million into the general reserve and the cumulative general reserve equal to 50%
of its paid-in capital; therefore Sohu Era did not appropriate any additional reserve during 2006. In 2007, Sohu Era further made an appropriation of approximately $199,000 due to its increased paid-in capital as a result of reinvestment. For the
year ended December 31, 2007, Beijing Sohu New Media Information Technology Co., Ltd (“Sohu Media”) and Beijing AmazGame Age Internet Technology Co., Ltd (“AmazGame Age”) made an appropriation of approximately $3.8 million
and $1.1 million to the general reserve fund, respectively. Upon certain regulatory approvals and subject to certain limitations, the general reserve fund can be used to offset prior year losses, if any, and could be converted into paid-in capital
of Sohu Era, Sohu Media, Sogou Technology and AmazGame Age for PRC GAAP and legal purposes. Other than the appropriations to the general reserve fund, the Company did not make any other appropriations for the years ended December 31, 2007 and
2006.

15. Profit Appropriation

Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion. Since Sohu ITC Information Technology (Beijing) Co., Ltd., (“Beijing ITC”), Beijing Sohu Interactive Software Co., Ltd (“Sohu Software”), Go2Map Software (Beijing) Co., Ltd (“Go2Map Software”) and Beijing Sohu New Media Information Technology Co., Ltd (“Sohu Media”) under PRC GAAP, are in an accumulated loss position, no appropriations have been made to the general reserve fund. For the year ended December 31, 2005, Beijing Sohu Era Information Technology Co., Ltd (“Sohu Era”) appropriated $1.7 million into the general reserve and the cumulative general reserve equal to 50% of its paid-in capital; therefore Sohu Era did not appropriate any additional reserve during 2006. For the year ended December 31, 2006, Beijing Sogou Technology Development Co., Ltd (“Sogou Technology”) made an appropriation of approximately $100,000 to the general reserve fund. Upon certain regulatory approvals and subject to certain limitations, the general reserve fund can be used to offset prior year losses, if any, and could be converted into paid-in capital of Sohu Era and Sogou Technology for PRC GAAP and legal purposes. Other than the appropriations to the general reserve fund, the Company did not make any other appropriations for the years ended December 31, 2006 and 2005.

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Table of Contents

13. Profit Appropriation

Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion. Since Sohu ITC Information Technology (Beijing) Co., Ltd., (“Beijing ITC”), Beijing Sohu Interactive Software Co., Ltd (“Sohu Software”) and Go2Map Software (Beijing) Co., Ltd (“Go2Map Software”) under PRC GAAP, are in an accumulated loss position, no appropriations have been made to the general reserve fund. Beijing Sohu Era Information Technology Co., Ltd (“Sohu Era”) has made appropriations of approximately $1.7 million and $2.0 million for the years ended December 31, 2005 and 2004, respectively, to the general reserve fund which, upon certain regulatory approvals and subject to certain limitations, can be used to offset prior year losses, if any, and could be converted into paid-in capital of Sohu Era for PRC GAAP and legal purposes. Other than the appropriations to general reserve fund, the Company did not make any other appropriations for the years ended December 31, 2005 and 2004.

11. Profit Appropriation

Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion. Since Sohu ITC Information Technology (Beijing) Co., Ltd., under PRC GAAP, is in an accumulated loss position, no appropriations have been made to the general reserve fund. Beijing Sohu Era Information Technology Co., Ltd (“Sohu Era”) has made appropriations of approximately $2.0 million and $1.3 million for the years ended December 31, 2004 and 2003, respectively, to the general reserve fund which, upon certain regulatory approvals and subject to certain limitations, can be used to offset prior year losses, if any, and could be converted into paid-in capital of Sohu Era for PRC GAAP and legal purposes. Other than the appropriations to general reserve fund, the Company did not make any other appropriations for the years ended December 31, 2004 and 2003.