Sohu on Being Official Internet Content Sponsor for the Beijing 2008 Olympic Games (SOHU 3Q05 Conf Call Quotes)

| About: Inc. (SOHU)

Last week Sohu (ticker: SOHU) was "chosen" as official Internet content sponsor for the Beijing 2008 Olympic Games. During last night's Q3 2005 earnings results conference call an analyst asked about the costs of gaining the Olympic sponsorship as well as any direct revenue opportunities arising from having it. CEO Charles Zhang and CFO Carol Yu had this to say:

The Olympic Web site, which is at Beijing right now there is not clear opportunity for SOHU to advertise on that site so we'll build that site but SOHU has the responsibility to market that site....

And also if you look at a SOHU web site today, it's already with a SOHU logo and a combined logo of the Olympics, regional Olympics and that brings trust and basically endorsement from the BOCOG. That will give our current advertisers and those Olympic sponsors and partners confidence in SOHU platform and believer that this and its affiliated work site are trusted platforms so this will not immediate, but on long term for the few years will have impact on our advertising clients.

....the Olympics site, the Bokoff (editor: BOCOG - Beijing Organizing Committee Olympic Games) site, site belongs to Bokoff. We helped him and we'll provide exclusive service to help them construct and maintain and host that site. The site belongs to Bokoff so is the advertising space on that site so SOHU does not host the advertising space on that site but as Charles has mentioned, we provide links to that site.

....regarding how much we paid for this, it is confidential.

(Quotes are from the CCBN StreetEvents transcript.)

Comment: On the call, management also discussed its strong advertising revenue growth. Its sequential brand advertising growth was largely driven by increased spending in the real estate, information technology and automobiles sectors.

However, the company saw modest sequential growth from its search business due largely to an increasingly competitive search environment. Any wonder the always bullish Charles Zhang is so excited about the Olympic sponsorship that has no clear rewards and may have cost him a bundle to secure? Sounds like his search business did not have the quarter he had hoped for!


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