SOHU / CYOU Joint Presentation March 2010 1 SOHU.COM INC. - PowerPoint PPT Presentation

SOHU / CYOU Joint Presentation March 2010 1 SOHU.COM INC. (NASDAQ: SOHU)

Safe Harbor Statement This presentation contains forward-looking statements, including, among other things, a statement of Sohu’s expectations regarding future profitability. Forward- looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the current global financial and credit markets crisis and its potential impact on the Chinese economy, the slower growth the Chinese economy experienced during the latter half of 2008 and in 2009, which could continue through 2010, the uncertain regulatory landscape in the People's Republic of China, fluctuations in Sohu's quarterly operating results, EPS dilution resulting from Changyou’s initial public offering, Sohu’s historical and possible future losses and limited operating history, and the company's reliance on online advertising sales, online games and wireless services (most wireless revenues are collected from a few mobile telecom operators) for its revenues. Further information regarding these and other risks is included in Sohu's Annual Report on Form 10K, its quarterly reports on Form 10Q, and in its other filings with the Securities and Exchange Commission. 2

Unique Combination of Two Strong Businesses: Sohu Portal - Changyou - Leading Mainstream Media Platform Leading MMORPG Company Strong brand recognition Diversified game portfolio � � Cross User base of more than Acquisition of new users, � � Fertilization particularly teenagers 250m Extensive advertising Contribution of revenues/ � � resources earnings/ strong cash flows Industry expertise of � 17173.com – China's largest gaming portal Portal business: one of the most powerful mainstream media platforms in China, regaining � momentum amidst economic recovery in 2010 Online game business conducted by Changyou: a leading player in the MMORPG � industry, an effective way to drive high growth and high profitability as well as to generate strong cash flows Unique combination of the two businesses secures long-term and sustainable growth � 3

Year -Year Record Full- Record Full Total Revenues Total Revenues Financial Track Record Y-o-Y Y-o-Y 2010 Q1 % % 2009 Q4 2009 Q3 2009FY 2008FY Guidance Total revenues $135.8m $136.6m 12% $515.2m $429.1m 20% $123m~128m $177.1m $169.3m Brand advertising $45.9m $48.5m 2% 5% $38m~40m $267.6m $201.8m Online games (CYOU) $70.7m $68.7m 21% 33% $70m~73m Operating margin (non- 42% 42% N/A 43% 41% N/A N/A GAAP)* Net income before NCI $50.3m $51.6m -15% $197.7m $169.2m 17% $45m~47.5m (non-GAAP)* Net income after NCI for $35.8m $37.4m N/A $155.3m $169.3m -8% $31m~33m diluted EPS (non-GAAP) Diluted EPS after NCI $0.92 $0.96 N/A $3.98 $4.29 -7% $0.78~0.83 (non-GAAP) Cash Balance $564m $596m N/A $564m $314m 80% N/A Debt Balance $0 $0 N/A $0 $0 N/A N/A Cash inflow from $67m $65m 16% $235m $218m 10% N/A operations * Non-GAAP operating income, net income and diluted EPS exclude the impact of share-based granted to employees. Ranked by Fortune magazine as the third-fastest growing U.S.-listed company based on financial performance over the past three years. 4

Strong Results Delivered by an Experienced and Focused Team Title Years Title Years Dr. Charles Zhang 14 Mr. Tao Wang 6 Chief Executive Officer Chief Executive Officer 7 Mr. Alex Ho 6 Ms. Carol Yu Chief Financial Officer Co-President and Chief Financial Officer 11 Mr. Dewen Chen 6 Ms. Belinda Wang President and Chief Co-President and Chief Operating Officer Operating Officer Mr. Xiaojian Hong 6 Mr. Xiaochuan Wang 10 Chief Technology Officer Chief Technology Officer The management team has been making all the right moves over the past 5+ years and � is flush with confidence and strong execution capability. 5

6 Portal Business: Advertising

China Online Advertising Industry More advertising spending anticipated in 2010 � − Events such as the World Cup, Asian games and World Expo are expected to drive advertising spending growth − Advertisers’ sentiments improved in a better economic environment � Advertisers more confident in 2010 outlook � Process of annual negotiation accelerating − Online media continues to gain market share from traditional media � Greater efficiency and effectiveness � Better ability to directly measure results 7

SOHU Brand Advertising Performance by Industry Top 3 industries (auto, real estate and online games) contributed over 50% of brand � advertising revenues in 2009 Q4 Fastest growing sectors in 2009 Q4: consumer electronics, retail clothing and auto � industry Auto: � − Expect to grow modestly in 2010 as government encourages auto sales in lower- tier cities, and more marketing activities are coming surrounding major events Real estate: � − Cautiously positive on the property market and expect moderate growth - government moves to curb speculation and cool down the market will benefit real estate industry for the long run Online games: � − As 17173 remain No.1 online game portal and default marketing platform for most online games, we expect revenue growth from major online game operators as well as small operators FMCG: Continuous growth expected � Revenue growth for 2010 will be in line with industry as compared with 2008, before � the economic downturn 8

Expanded Efforts in Video Content Offering Fighting piracy through the China Online Video Anti-Piracy Alliance generates positive � results − Pressures local video sites to increasingly remove pirated content − Makes Sohu the partner of choice for many leading global and local media companies � e.g. Exclusive broadcasting for the premiere of “The Qin Empire,” a popular TV drama in China, before it aired on TV stations − Raises hurdles for existing online video sites engaged in online video piracy − Provides Sohu ample opportunities to increase both users and advertising revenues Largest online library of authorized high-definition video content � Quality self-produced programs also broadly circulated by local TV stations � Average daily video views and revenues from TV channel up by ~30% Q-o-Q � Meaningful revenues from video advertising expected in 2 to 3 years � 9

Continuing to Update Technology and Product Quality Sogou Pinyin Continuous updates help to secure market leadership � position while increasing user stickiness Installed on 70%~80% of PCs in China and continues � to increase − Over 100 million weekly active unique users − Timely collection of user behavior helps to increase effectiveness of targeted marketing on Sohu platform − Supported by a vast word database (including 1 billion Chinese names) to increase typing efficiency − Mobile version continues to grow in popularity and will help Sohu users watch online videos through their mobile handsets with the future widespread implementation of 3G technology To cross-market our other leading products such as online video and news sites � 10

Continuous Investment in Marketing Sohu plans to implement marketing activities that will further promote � our products, such as high definition video content in 2010 Great success with “Browse Sohu, Know the World” marketing � campaign in 2009 − Average daily unique visitors to Sohu news channel increased approximately 20% Y-o-Y in 2009 FY − Number of people frequently surfed Sohu increased 10% Q-o-Q in 2009 Q4 (Based on third- party research) 11

Resource Allocation Focused on Content and Technology Sohu Portal Employees % Content 1,438 55% Tech 777 30% Sales & CS 296 11% Back office 118 4% Total 2,629 100% 12

13 Online Games: CYOU

14 Industry Update