Sohu Reports Strong Second Quarter

    July 28, 2008

The best of China will be put on display during the Olympics – the most beautiful landscapes, the cleanest streets, and the happiest citizens.  Don’t be surprised if a Sohu banner turns up, too, as the search company’s second-quarter results were quite impressive.

Sohu earned $40.2 million in net income during the quarter ending June 30th, which puts it up 604 percent over the same period last year and 86 percent over last quarter.  The growth of China’s online population deserves at least part of the credit.  Interest in the Olympics has also had a role.

Charles Zhang
 Charles Zhang

Otherwise, Dr. Charles Zhang, Sohu’s chairman and CEO, spoke about "our strong media influence, premier content offerings and increased popularity of our products such as Sohu Blogs and Sogou Pinyin, and the growth of our online games business."  And that last factor deserves a special look.

It seems Sohu is interested in putting Changyou, the games unit, onto the U.S. stock market with an IPO.  Numbers, dates, and dollar amounts aren’t yet being shared, but Sohu would remain a majority shareholder.  The parent company could then concentrate on its core businesses without giving up loads of control or revenue.

For this reason and several others, Sohu expects its third quarter to turn out well.  The company’s stock, meanwhile, is experiencing some turbulence that’s roughly in line with the rest of the tech sector.