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Sohu.com Media Plaza

Key Information

Sohu.com Internet Plaza

Sohu, Inc. (Chinese: 搜狐; pinyin: Sōuhú; lit. 'Search-fox') is a Chinese Internet company headquartered in the Sohu Internet Plaza in Haidian District, Beijing.[3][4] Sohu and its subsidiaries offer advertising, a search engine (Sogou.com), on-line multiplayer gaming (ChangYou.com) and other services.

History

[edit]

Sohu was founded as Internet Technologies China (ITC) in 1996 by Charles Zhang after he completed his PhD from the Massachusetts Institute of Technology and received venture capital funding from colleagues he met there.[5] The following year, Zhang changed the name of ITC to Sohoo in homage to Yahoo! after meeting its cofounder, Jerry Yang; the name was soon after changed to Sohu to differentiate it from the American company.[6] Sohu has been listed on NASDAQ since 2000 through a variable interest entity (VIE) based in Delaware.[7][8]

Sohu's Sogou.com search engine was in talks to be sold in July 2013 to Qihoo for around $1.4 billion.[9] On September 17, 2013, it was announced that Tencent has invested $448 million for a minority share in Chinese search engine Sogou.com, the subsidiary of Sohu, Inc.[10]

Sohu was ranked as the world's third- and twelfth-fastest growing company by Fortune in 2009 and 2010, respectively.[11][12]

Allegations against Google

[edit]

On April 6, 2007, Sohu made a request that Google stop providing its Google Pinyin Input Method Editor software for download because portions of Sohu's IME software, Sogou Pinyin, were allegedly copied in order to construct it.[13] The detection of the alleged copyright infringement was found due to a suspicious error found in both IMEs, notably the translation of the pinyin "pinggong" which erroneously produces the actor and comedian Feng Gong.[14] On April 9, 2007, Google's spokesman Cui Jin has admitted that the pinyin Google IME "was built leveraging some non-Google database resources."[15]

2008 Olympic Games website

[edit]

In November 2005, Sohu was selected to be the Official Internet Content Service Sponsor of the Beijing 2008 Olympic Games. Sohu was provided exclusive services to construct, operate and host the official Beijing Olympics website.[16]

References

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Sohu

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from Grokipedia
Sohu.com Limited (: SOHU) is a leading Chinese online media platform and game business group that provides comprehensive online products and services, including brand advertising, , video content, live broadcasting, and online games, primarily targeting users in the via personal computers and mobile devices. Founded in 1996 by Dr. Charles Zhang (also known as Chaoyang Zhang), a prominent Chinese entrepreneur, Sohu initially launched as China's first online in 1997 and officially debuted its , www.sohu.com, in February 1998. The company went public on the NASDAQ stock exchange on July 17, 2000, becoming one of the first Chinese internet firms to list in the United States, which marked a significant milestone in its growth amid the dot-com era. Over the years, Sohu expanded through strategic acquisitions and spin-offs, including the 2009 initial public offering of its gaming subsidiary Changyou.com Limited and the 2017 spin-off of its search engine Sogou Inc. via an IPO on the New York Stock Exchange, allowing Sohu to refocus on its core media and gaming operations. As of 2025, Sohu continues to operate through two primary segments: the Sohu segment, which encompasses its media platform delivering news, information, and entertainment content via apps like the Sohu News App and Sohu Video App, as well as websites such as www.sohu.com and m.sohu.com; and the Changyou segment, focused on developing and operating massively multiplayer online role-playing games (MMORPGs), including titles like Tian Long Ba Bu for PC and mobile. Sohu's media business emphasizes high-quality original content, user-generated material, and , serving a broad audience with text, images, videos, and live streams, while its gaming division generates the majority of revenues through in-game purchases and subscriptions in the competitive Chinese gaming market. In recent financial performance, for the third quarter of 2025 ended September 30, total revenues reached , up 19% year-over-year, with the gaming segment accounting for or approximately 90% of the total, and GAAP net income of . Headquartered in , Sohu maintains a strong position in China's digital ecosystem, leveraging its technological advancements and content ecosystem to engage millions of daily .

Company Overview

Founding and Leadership

Sohu was founded in August 1996 by Charles Zhang (Zhang Chaoyang) in as Internet Technologies China (ITC), with an initial emphasis on developing technologies to capitalize on 's emerging online landscape. The company emerged during a period when in was limited but rapidly expanding, positioning ITC to address the growing demand for digital infrastructure and services. Zhang, who had recently returned to China after earning a PhD in from the Massachusetts Institute of Technology in 1994, brought technical expertise from his prior role at Internet Securities Inc., where he worked from 1995 to contribute to early online financial tools. His vision was shaped by observations of global pioneers, leading to the establishment of ITC alongside co-founder Edward Roberts, an MIT professor, and a small early team of engineers and academics focused on innovative web solutions. In May 1997, following a pivotal meeting with Yahoo! co-founder , ITC underwent a to Sohu, a name derived from "search fox" to evoke agility in , mirroring Yahoo!'s model while adapting to Chinese users. This shift marked a strategic pivot toward building a comprehensive portal, combining search capabilities, content aggregation, and community features tailored for the domestic market. Zhang's leadership has remained central since the founding, serving continuously as Chairman and , guiding Sohu through its evolution from a startup to a major player in China's digital ecosystem. As of 2025, Sohu's executive team continues to reflect Zhang's foundational influence, with key roles filled by seasoned professionals including Chief Financial Officer Joanna Lv, who oversees financial strategy and reporting. The early vision under Zhang's direction was to create a "Chinese Yahoo!," integrating search engines, news portals, and interactive services to empower users with accessible online information and entertainment in a then-regulated and developing internet environment. This approach emphasized user-centric innovation, setting the stage for Sohu's growth as a multifaceted platform.

Corporate Structure and Subsidiaries

Sohu.com Limited is a publicly traded company listed on the under the SOHU since its in 2000. The company is headquartered at Sohu Internet Plaza in the Haidian District of , , and employs approximately 4,300 people as of late 2024. To navigate restrictions in China's sector, Sohu employs a (VIE) structure, which allows the Cayman Islands-incorporated to control and consolidate the financial results of its PRC-based operating entities through contractual arrangements rather than direct equity ownership. Sohu is controlled by its founder, Dr. Charles Zhang, who serves as Chairman of the Board and and holds a significant stake through personal and affiliated entities, representing over 55% of voting power as of 2025. There have been no major changes to the board composition in recent years, maintaining stability in leadership as of 2025. Among its current subsidiaries, Changyou.com stands as a fully owned entity focused on developing and operating PC and mobile games, forming a core part of Sohu's operations. Previously, .com served as a key providing services, but it was sold to Holdings in 2020 for approximately $3.5 billion, marking a significant divestiture in Sohu's portfolio. As of 2025, Sohu's revenue is primarily derived from brand advertising through its media platforms and online games via Changyou, with total revenues for the third quarter reaching $180 million, up 19% year-over-year following a decline in the second quarter, amid evolving market dynamics and content investments.

Business Operations

Media and Advertising Services

Sohu.com serves as a comprehensive online media platform in China, delivering a wide array of content including news, entertainment, and user-generated material through its web portal and associated applications. The platform emphasizes aggregated news feeds, multimedia articles, and interactive features to engage users, with the Sohu News app functioning as a prominent mobile aggregator that curates content from diverse sources across categories such as politics, technology, and lifestyle. Sohu Video operates as a key streaming service within Sohu's media ecosystem, offering a mix of original productions and licensed content tailored to Chinese audiences. The platform specializes in high-demand genres like dramas, variety shows, and live broadcasts of events, enhancing user retention through social sharing tools and community interactions that allow viewers to comment and recommend content in real time. Advertising constitutes the primary revenue mechanism for Sohu's media operations, with brand advertising—encompassing display ads, sponsored articles, and video integrations—forming the bulk of non-gaming income. In the third quarter of 2025, marketing services revenues, largely driven by these brand efforts, totaled US$14 million, down 27% year-over-year amid intensified competition from platforms like ByteDance and Tencent. To optimize ad delivery, Sohu employs AI-driven personalization, leveraging vector databases for precise content recommendations that match user preferences and boost engagement rates. As of , Sohu's media platforms have shifted predominantly toward mobile consumption, with the majority of user traffic originating from mobile devices and apps, underscoring a strategic emphasis on short-form videos and seamless integrations to capture on-the-go audiences in China's highly digitized market.

Online Gaming

Changyou.com, a wholly-owned of Sohu established in 2007, serves as the primary vehicle for Sohu's online gaming operations. It develops and operates a range of massively multiplayer online games (MMORPGs) for PC and mobile devices, alongside casual games targeted at the Chinese market. The subsidiary completed its initial public offering on in April 2009, raising approximately $120 million. Notable titles in its portfolio include the long-running Tian Long Ba Bu (TLBB) series, internationally known as Dragon Oath, which features arts-themed , along with mobile adaptations that extend the franchise's reach to users. Changyou's business model centers on access, monetized primarily through in-app purchases of virtual items, cosmetics, and gameplay enhancements. This approach has sustained a loyal player base in but faces challenges from market saturation. In the third quarter of 2025, revenues totaled US$162 million, up 27% year-over-year, primarily due to strong performance from the Tian Long Ba Bu series, despite ongoing competition from industry leaders and . To bolster visibility, Changyou occasionally promotes its games via Sohu's media ecosystem, including Sohu Video. The 's development efforts prioritize cross-platform compatibility to bridge PC and mobile experiences, while maintaining a strong emphasis on the domestic Chinese audience due to regulatory and localization barriers limiting international growth. Changyou utilizes proprietary technology platforms, featuring advanced and 3D graphics engines alongside a unified development framework that supports robust multiplayer interactions and anti-cheating measures. With around 1,000 employees dedicated to game development, the team continues to iterate on existing IPs and explore new MMORPG concepts tailored to regional tastes. In the third quarter of 2025, Sohu's total revenues reached $180 million, up 19% year-over-year, with the gaming segment contributing the majority. The company reported a of $9 million, marking a return to profitability.

Historical Development

Inception and Early Growth (1996–2000)

Sohu was founded in August 1996 as Internet Technologies China Incorporated (ITC) by Charles Zhang, a who had recently returned from the , with the aim of creating a Chinese-language search and service modeled after Yahoo!. In January 1997, ITC launched its initial website, itc.com.cn, offering basic services such as , online forums, and a rudimentary directory-based to facilitate web for Chinese users. Following a pivotal meeting with Yahoo! co-founder in May 1997, Zhang rebranded the company as Sohu—meaning "search fox" in Chinese—to emphasize its focus on search technology and portal services, marking a strategic pivot toward becoming a comprehensive gateway amid China's emerging online ecosystem. In February 1998, Sohu re-launched its platform as www.sohu.com, establishing it as one of China's first major portals with expanded features including aggregation, community forums, and enhanced search functionalities tailored to and culture. The site experienced rapid adoption, averaging 6 to 7 million daily page views by 1998-1999, with over 90% of traffic originating from , capitalizing on the limited competition in the nascent market before the rise of rivals like Sina in late 1998 and in 2000. This growth aligned with China's user base expanding from approximately 120,000 in 1996 to 8.9 million by the end of 1999, driven by increasing PC penetration in urban areas and early dial-up connectivity. Between 1999 and 2000, Sohu invested in advancing its search technology, developing proprietary algorithms and prototypes that laid the groundwork for future innovations like the engine, while preparing for international expansion through a (VIE) structure to comply with Chinese restrictions on in services. In 1999, the company formally renamed itself Sohu.com Inc. to reflect its portal identity. Culminating these efforts, Sohu went public on on July 12, 2000, issuing 4.6 million shares at $13 each, raising gross proceeds of $59.8 million in a listing that captured the dot-com bubble's enthusiasm for Chinese tech firms despite a flat debut. The VIE arrangement allowed Sohu to list abroad while maintaining control over its domestic operations via contractual agreements. Throughout this period, Sohu navigated significant challenges posed by China's underdeveloped infrastructure, including limited bandwidth, unreliable dial-up access, and low penetration rates outside major cities, which constrained user onboarding and content delivery. Additionally, evolving government regulations, such as the Interim Provisions on the Management of Computer Information Networks and the regulations requiring content registration and censorship compliance, imposed strict oversight on online services to prevent dissemination of politically sensitive material, forcing Sohu to self-censor and register with authorities from inception. These hurdles, combined with over telecom infrastructure, tested Sohu's resilience but underscored its role in pioneering commercial in a heavily regulated environment.

Expansion and Key Milestones (2001–2010)

During the period from to 2005, Sohu diversified its portfolio by entering the wireless and mobile sectors, launching services via sms.sohu.com in to cater to users. The company further expanded into messaging services in 2005, resuming operations after a regulatory hiatus to enhance mobile content delivery. Concurrently, Sohu introduced video-related offerings as part of its broadening media services. In 2004, Sohu launched .com, its proprietary designed to provide comprehensive web and knowledge-based searching capabilities. This period saw robust revenue growth, rising from approximately $10 million in to $108.3 million in 2005, fueled largely by which accounted for over 65% of total revenues by the latter year. A pivotal milestone occurred in November 2005 when Sohu was selected as the Official Internet Content Service Sponsor for the 2008 by the Beijing Organizing Committee. Under the agreement, valued at around $30 million, Sohu was tasked with constructing, operating, and hosting the official BOCOG website, beijing2008.com, to deliver exclusive content and services. In 2007, Sohu carved out its gaming operations into Changyou.com Limited as a standalone entity in December, following the May launch of its flagship , Tian Long Ba Bu (also known as Dragon Oath internationally), which quickly gained popularity among players. This move strengthened Sohu's position in the online gaming market. The 2008 Olympics marked a high point for Sohu, with beijing2008.com managing peak traffic in the millions of daily visitors during the Games, contributing to Sohu's 15% share of Olympic news portal viewership in . The event significantly elevated Sohu's brand visibility and user engagement across its platforms. From 2009 to 2010, Changyou completed its initial public offering on NASDAQ in April 2009, raising $60 million and marking one of the few successful Chinese IPOs amid the global financial crisis. Sohu was recognized as the world's third-fastest-growing company by Fortune magazine in 2009 and twelfth in 2010, reflecting its sustained expansion. By 2010, Sohu's annual revenue had surpassed $612 million, underscoring the impact of its diversified operations in media, search, and gaming.

Modern Era and Restructuring (2011–present)

In the early , Sohu navigated strategic partnerships amid growing competition in China's sector. In 2013, invested $448 million to acquire a 36.5% stake in Sohu's search unit, with an option to increase it to 40%, aiming to bolster user engagement and search capabilities. Earlier that year, had engaged in preliminary talks to acquire for approximately $1.4 billion, but the negotiations ultimately failed, paving the way for the deal. By the mid-2010s, Sohu's revenues reached a peak of $1.86 billion in 2017, driven by diversified operations in media, search, and gaming. However, intensifying market pressures prompted a shift toward consolidation. From 2016 to 2020, the company refocused on its core media and gaming segments, streamlining non-essential operations to enhance profitability. A pivotal event occurred in 2020 when took private in a $3.5 billion transaction, with Sohu receiving approximately $1.18 billion in cash proceeds and relinquishing its ownership stake. This divestiture provided substantial cash reserves for Sohu but narrowed its business scope, emphasizing sustainability in media platforms and gaming, including contributions from Changyou to maintain gaming revenue stability. Following the Sogou sale, Sohu undertook post-sale restructuring to optimize its operations, prioritizing efficiency in its remaining core businesses through 2023. The company issued its 2025 notice in August, reflecting ongoing governance and strategic planning efforts. In 2024 and 2025, Sohu faced revenue challenges amid a broader market slowdown. Total revenues for the first quarter of 2025 were $136 million, a 3% decline year-over-year. By the second quarter, revenues fell to $126 million, down 27% year-over-year, with services contributing $16 million, a 21% drop. On November 17, 2025, Sohu reported third-quarter results with total revenues of $180 million, up 19% year-over-year and 43% quarter-over-quarter, primarily driven by the gaming segment's $162 million contribution, signaling improved operational stability.

Intellectual Property Disputes

Sohu has been involved in several disputes within China's competitive tech and media landscape, often positioning itself as both a defender and accuser of violations. These conflicts highlight the broader challenges of enforcing IP rights in the country's rapidly evolving online environment, where content aggregation and search technologies frequently intersect with infringement claims. In 2007, Sohu accused Google of copying elements from its Sogou Pinyin input method editor (IME) database in the development of Google's own Chinese IME tool. The allegation centered on identical translation errors, such as the pinyin input "pinggong" erroneously yielding the name of comedian Feng Gong, suggesting unauthorized use of Sohu's proprietary user data. Google admitted to incorporating external resources but denied direct copying, issuing a public apology and removing the disputed data without escalating to a formal lawsuit. This incident underscored early tensions over software IP in Chinese input technologies, with Sogou's database playing a key role in Sohu's claims. Between 2006 and 2010, Sohu faced significant legal setbacks as a defendant in cases related to unauthorized content distribution. In a landmark 2006 ruling, a ordered Sohu to pay approximately $140,000 in damages to major Hollywood studios, including , 20th Century Fox, and , for hosting pirated movie downloads on its platform without permission. The decision marked one of the first major victories for foreign holders against a Chinese portal, emphasizing Sohu's liability for user-uploaded infringing material. Concurrently, in 2008, international music labels such as Universal, , and Warner Music sued both Sohu and for facilitating illegal music downloads through search , alleging direct infringement. These cases resulted in mixed outcomes; while Baidu prevailed in a 2010 decision, clearing it of liability for third-party , Sohu navigated similar pressures amid ongoing industry-wide scrutiny. Sohu's IP activities shifted toward aggressive enforcement in the , particularly against competitors in video and news sectors. In 2013 and 2014, Sohu initiated lawsuits against and news aggregator (Jinri Toutiao) for alleged theft of video copyrights and unauthorized aggregation of original news content. Specifically, Sohu claimed reformatted and republished its articles without consent, infringing on exclusive rights to multimedia and textual works. In a notable joint effort, Sohu collaborated with and U.S. studios via the to sue in 2013, seeking over 300 million yuan in damages for enabling widespread video piracy through search results and links to infringing sites. A Beijing court ruled in favor of the plaintiffs in late 2013, finding liable and ordering compensation, though enforcement and full resolution extended into subsequent years. Throughout these disputes, Sohu has actively advocated for stronger anti-piracy measures in . CEO Charles Zhang Chaoyang publicly called for an end to internet piracy in 2009, warning that unchecked infringement would undermine legitimate and distribution. Zhang reiterated this stance in 2013 during the Baidu lawsuit, emphasizing the need for collective industry action to protect copyrights and foster sustainable growth. By 2014, Zhang declared significant progress in curbing video piracy through targeted legal campaigns, though no major IP victories for Sohu have been reported since 2015.

Corporate Governance and Securities Issues

In 2019, a lawsuit was filed in the U.S. District Court for the Southern District of New York against Inc., a then-subsidiary of Sohu, alleging that the company and its officers made material misrepresentations and omissions in its registration statement for the November 2017 (IPO). The complaint specifically claimed that failed to disclose the heavy dependence of its business on a limited number of key advertisers and the associated risks of reduced spending by those advertisers, which contributed to uncertainties in revenue projections following the IPO. The case was later stayed in a court in October 2019 at the request of defendants, including and Sohu as a controlling entity, pending resolution of related proceedings. Between 2020 and 2023, Sohu faced securities litigation related to its subsidiary Changyou.com Limited during the latter's going-private transaction. The class action, filed in the U.S. District Court for the Southern District of New York (Case No. 1:21-cv-07858-GHW), accused Changyou, Sohu.com Limited as the controlling shareholder, and certain executives of issuing misleading statements in the February 2020 Rule 13e-3 Transaction Statement, particularly regarding minority shareholders' dissenters' and appraisal rights under Cayman Islands law in connection with the merger. These claims arose amid the acquisition by Sohu, which valued Changyou at approximately $365 million and highlighted optimistic projections for Changyou's online gaming revenues that plaintiffs argued were not fully disclosed in terms of associated risks. The litigation was resolved through a settlement approved by the court on January 27, 2023, with a claims deadline of January 23, 2023, providing recovery to affected shareholders who purchased American Depositary Shares (ADS) between February 19 and April 23, 2020. Sohu has also encountered internal governance challenges involving executive non-compete agreements, notably in a 2023 arbitration case against Ma Xiaonan, the former general manager of Sohu Video. After resigning in late February 2023, Ma joined Youku Tudou, a competitor owned by Alibaba, allegedly breaching a post-resignation non-compete agreement that prohibited with rivals until August 2024. Sohu filed a petition with the Municipal Labor Arbitration Commission, seeking approximately $7.5 million (CNY 50 million) in damages for the violation. The arbitrator ruled in Sohu's favor, ordering Ma to pay double the non-compete compensation she had received and to continue fulfilling the agreement's terms, underscoring authorities' enforcement of such clauses in executive contracts. Broader critiques of Sohu's have centered on its (VIE) structure, which is used to operate its PRC-based businesses amid restrictions. SEC filings, including the 2024 Form 20-F, explicitly highlight risks such as potential invalidation of the VIE arrangements by Chinese regulators, which could disrupt control over subsidiaries and lead to loss of investment in those entities without compensation. These disclosures note that any finding of non-compliance with PRC laws could result in fines, business suspension, or forced restructuring, exposing shareholders to significant uncertainties. At the 2025 (AGM) held in August, discussions emphasized board transparency measures amid ongoing revenue declines, with total revenues dropping 27% year-over-year to $126 million in the second quarter, primarily due to weakness in and gaming segments. No major executive changes were announced at the AGM, though the company maintained its focus on internal controls. Sohu's stock has experienced heightened volatility tied to U.S.- tariff escalations, including a sharp decline in April 2025 following tit-for-tat increases that pressured Chinese tech firms' valuations.

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  75. https://cyberlaw.stanford.edu/blog/2014/07/sohu-vs-toutiao-chinese-mobile-news-app-sued-news-publishers-copyright-infringement/
  76. https://www.hollywoodreporter.com/news/general-news/beijing-court-finds-search-engine-664095/
  77. https://investors.sohu.com/news-releases/news-release-details/joint-action-against-online-video-piracy-china
  78. https://deadline.com/2014/10/china-piracy-problem-solved-sohu-ceo-851041/
  79. https://finance.yahoo.com/news/shareholder-alert-pomerantz-law-firm-173500666.html
  80. https://robbinsllp.com/sogou-inc/
  81. https://www.goulstonstorrs.com/press-releases/goulston-storrs-wins-stay-of-sogou-class-action-litigation-in-california/
  82. https://www.labaton.com/cases/in-re-changyou-com-limited-securities-litigation
  83. https://zlk.com/press/changyou-com-limited-class-action-lawsuit
  84. https://www2.yicaiglobal.com/news/beijing-arbitrator-finds-former-sohu-video-executive-in-breach-of-non-compete-agreement
  85. https://www.sec.gov/Archives/edgar/data/1734107/000119312525053425/d901296d20f.htm
  86. https://seekingalpha.com/article/4825800-sohu-stock-needs-another-catalyst-to-rally-higher
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