Brandi Piacente - The Piacente Group Dr. Charles Zhang - Chairman of the Board, Chief Executive Officer Belinda Wang - Co-President, Chief Marketing Officer Dr. Gong Yu - Chief Operating Officer Carol Yu - Co-President, Chief Financial Officer

Dick Wei - J.P. Morgan Jason Brueschke - Citigroup Wallace Chung - Credit Suisse Eddie Leung - Merrill Lynch Tian Hou - Pali Capital Victor Tseng - Deutsche Bank Richard Ji - Morgan Stanley C. Ming Zhao - Susquehanna Financial Group

Ladies and gentlemen, thank you for standing by. Welcome to the Sohu third quarter 2008 earnings conference call. (Operator Instructions) At this time, I would like to turn the conference over to Miss Brandi Piacente, Investor Relations. Please go ahead.

Thank you for joining Sohu.com to discuss our third quarter results. On the call today are Chairman and Chief Executive Officer, Dr. Charles Zhang; Co-President and Chief Financial Officer, Carol Yu; Chief Operating Officer, Gong Yu; Vice President of Online Game Business, Wang Tao; and Senior Finance Director, Alex Ho. Before management begins their prepared remarks, I would like to read you the Safe Harbor statement in connection with today’s conference call. Except for the historical information contained herein, the matters discussed in this conference call are forward-looking statements. These statements are based on current plans, estimates, and projections and therefore you should not place undue reliance on them. 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 statements. 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 company, Sohu's historical and possible future losses, limited operating history, uncertain regulatory landscape in the People’s Republic of China, fluctuations in quarterly operating results, and the company’s reliance on online advertising sales, online game revenues, and mobile phone related wireless revenue for its revenues. Further information regarding these and other risks are included in Sohu's annual report on Form 10-K and other filings with the Securities and Exchange Commission. Now, let me turn the call over to Dr. Charles Zhang, Chairman and CEO. Charles. Dr. Charles Zhang: Thank you, Brandi. Hello, everyone. Thank you for joining us today. We are very pleased to report another strong quarter of financial results. The third quarter of 2008 marks the fifth consecutive quarter in which we reported record total revenues, record revenues in every category, and record net income. For the third quarter of 2008, our total revenue grew by 18% quarter on quarter and 134% year-on-year to $120.7 million. Brand advertising revenue increased by 18% quarter on quarter and 66% year-on-year to $49.4 million. Online game revenue reached $54.6 million, an increase of 14% quarter on quarter and 330% year-on-year. Non-GAAP net income was $42.8 million, up 1% quarter on quarter and 266% year-on-year. Excluding the one-time $4.1 million income tax reversal in the second quarter, our non-GAAP net income for the third quarter actually would have grown a strong growth of 12% quarter on quarter. All of these metrics exceeded the high-end of company guidance. By every account, Sohu had an enviable third quarter. Now I would like to make a few comments on the Chinese economy and what we are seeing in our business. Although the global macroeconomic environment continues to be volatile and many economies are showing slowing growth, China relatively speaking continues to enjoy decent GDP growth. Based on a recent report published by the National Bureau of Statistics, for the third quarter China’s GDP growth was 9% year-on-year. September PMI increased by 2.8 to 51.2 [inaudible]. During the national holiday from September 29th to October 5th, total retail sales of consumer goods climbed by 21% year-on-year. China’s economy is expected to be fueled by domestic consumption. Global companies look to China for their future growth. Just to name a few, Nike expects their future orders in China to be up nearly 50% while Coca-Cola’s $2.4 billion acquisition of [inaudible] Juice speaks for its confidence in this market. As of today, we haven’t seen any of our major advertisers making significant changes to their fourth quarter online marketing campaigns. Since we have just begun the annual negotiation process with advertisers for their 2009 budget allocations for Sohu, it is still too early to comment on the expected growth for 2009. However, we can share some added visibility of the business drivers with you. First, the Internet has become a leading media sources in China, with user growth rapidly expanding over the last several years and the even stronger adoption rate by the users during the aftermath of the tragic Sichuan earthquake in May of this year, the Beijing 2008 Olympic Games in August and the lift-off of the Chinese Space Shuttle in September. Second, due to significant expansion of Internet penetration and an increase of Internet media consumption rate, advertisers’ ability to conduct targeted online marketing campaigns and to directly measure results, advertisers continue to shift more ad budget from offline to online sources to maximize the cost of efficiency and effectiveness of their marketing campaigns, despite some multi-national advertisers may have smaller advertising budgets [inaudible]. Three, domestic companies are expected to increase their business focus and ad spending in local markets as a result of continued strength of domestic consumption, while reducing their reliance on overseas markets. This will result in more online advertising spending in China from those companies. Four, we have seen no significant change in spending behavior in major industries, such as the auto industry, fast-moving consumer goods industries, which have been largely unaffected by the macroeconomic conditions to date. Five, although the real estate market could experience a slowdown in the first half of 2009 due to slower property transaction volumes, we remain optimistic about 2009 and the positive effect of recent government measures to stabilize the property market. Finally, Sohu's online game business will not be adversely affected by the macroeconomic climate and will continue to perform well. With that, let’s take a closer look at Sohu's businesses. First, our portal business and our major successes surrounding the Beijing Olympics -- due to strong execution of our Olympic media strategy, which was supported by the rollout of an all-out promotional campaign across first and second tier cities, Sohu quickly became recognized across China as the number one portal of choice for Olympics reporting. In a few moments, Dr. Gong Yu, our Chief Operating Officer, will share with you some market research results that further demonstrate the strength of our portal during this major worldwide event. One strong metric we are very proud of is our daily unique visitors to our portal, which grew 100% year-on-year during the Olympic period. More importantly, most of these new users have stayed with us, demonstrating the success of our media strategy, appeal of our premium content and strength of the Sohu brand. Now that the Olympic Games have ended, we will continue to leverage the momentum of our media strategy and elevate our portal to an even more dominant and influential media platform. We will continue to do what we do best, and that is attracting new users to Sohu websites through our differentiated content and technological initiatives. An example of our differentiated content is the Sohu Beijing report, an original in-house production of an online talk show that combines all forms of content, including text, pictures, and videos. We interviewed 50 famous celebrities from all over the world, such as Zhang Yimou, Chief Director of the Olympic Opening Ceremonies, and Yao Ming, China’s number one NBA basketball player. And the format is freestyle and unscripted conversations on a variety of topics, including Olympics sports culture, personal interest stories, and other subjects of interest. The program has gained a strong popularity and was viewed more than 20 million times, while content and pictures have been quoted or reproduced over 500,000 times by other media, including the 72 TV stations across China. Now let me update you on our technological innovations and advancement, which have always been one of our core strengths resulting in increased user stickiness on our portal. The Sogo Pinyun method continues to gain popularity and expanding market shares through superior product quality and effective marketing campaigns. In the third quarter, average daily users of the Sogo Pinyun increased by 30% quarter on quarter and we estimate that Sogo Pinyun has been installed in roughly 50% of PCs in China. You will be provided with a review of our brand advertising business shortly but first let me discuss our online game business. For the third quarter of 2008, online game revenue increased 14% quarter on quarter and 330% year-on-year to reach $54.6 million. Our strong performance is a direct reflection of our successful strategy of focusing on enhancing users’ in-game experience and cultivation of our strong development capability. While Tian Long Ba Bu is maturing in our domestic markets with 11% quarter on quarter growth, we are pleased to report two important growth drivers this quarter. First, Tian Long Ba Bu’s overseas revenue grew 25% to $2.7 million, and second, revenue from the revitalized Blade Online grew 52% to $3.6 million. Now let me review our progress with Tian Long Ba Bu -- Tian Long Ba Bu continued to gain users and performed well in China’s online game market. Revenue in Mainland China increased by 11% quarter on quarter to $48.3 million, despite the summer holidays, which is typically a slow season for online game consumption. As expected, there were minimum impact from the Olympics on Tian Long Ba Bu as well. Overall, we are very pleased with Tian Long Ba Bu's revenue growth, which remains on track with our expectations. Even more impressive is our ability to attract new gamers and drive continued revenue growth without having to [push up our value], which we believe will further expand the life cycle of the game. As of September 30th, registered accounts of Tian Long Ba Bu increased by 17% quarter on quarter from $33 million to $39.4 million. Peak concurrent users for the quarter were consistent with the second quarter at approximately 700,000 users. For the third quarter, active paying accounts increased by 11% quarter on quarter, from 1.68 million to 1.86 million. Quarterly average revenue per active paying accounts, or ARP value, of RMB178 was flat with the second quarter. We will continue to provide weekly updates and release quarterly expansion packs, and our next expansion pack is planned to be launched in December of this year. Now I will briefly discuss two important growth drives on our game business for the quarter. First, Tian Long Ba Bu’s overseas licensing revenue -- we have successfully exported Tian Long Ba Bu to three regions with commercial operation in Vietnam, beginning in August 2007 and Taiwan and Hong Kong in April 2008. These licensing agreements follow our standard licensing arrangement, which typically lasts for two to three years with an up-front lump sump licensing fee plus revenue sharing. For the third quarter, revenue from these overseas markets grew by 25% quarter on quarter to $2.7 million, compared to a $2.2 million last quarter. During the third quarter, the cumulative peak concurrent users of these three regions was approximately 100,000. Going forward, we plan to export Tian Long Ba Bu to other overseas market on a selective and opportunistic basis. Second, in June 2008, we launched a major expansion pack for Blade Online and this has reignited user interest. PCUs, peak concurrent users, hit a record high of 82,000 during the quarter, with revenue increased by 52% quarter on quarter to $3.6 million. We believe the successful revitalization of this four-year old game demonstrates our strong and unparalleled development capabilities to expand the game’s life cycle. We plan to launch a second major expansion pack of our Blade Online during the second quarter of 2009. Next, our game pipeline -- we continue to enhance our game development pipeline to ensure healthy long-term growth in our game business. Development work is on track for both Duke of Mountain Deer and Legend of Ancient World. In addition, recently we obtained an exclusive license to operate a new game, Immortal Faith, in China. It’s a 2D item-based RPG game based on an ancient Chinese mythology. This game entered into technical closed beta testing in September. Finally, I would like to talk about our stock buy-back. Management believes with a recent volatility in our stock price, there is an excellent opportunity to execute yet another stock buy-back program. Earlier today, we announced a stock repurchase program of $150 million, which represents approximately 8.7% of our market cap as of market close last Friday, October 24th. The repurchases will be made on an opportunistic basis from the open market and will last until the end of 2009. This speaks to management’s confidence in Sohu's business and growth prospects, and our willingness to invest the necessary capital to add value to Sohu's shareholders. This concludes my remarks for today. Next I will read the prepared remarks on behalf of Belinda Wang, Co-President and Chief Marketing Officer, who is on an unplanned travel today. For the third quarter of 2008, we are pleased to report another record quarter of brand advertising revenue, which increased 66% year-on-year and 18% quarter on quarter to $49.4 million. The strength of our advertising business was mainly attributed to: one, strong advertising spending related to the Olympics. In the third quarter, ad spending of Olympics sponsors on the Sohu portal grew by 105% year-on-year; second, continuous shift of advertising budgets from offline to online; third, further increases in the overall effectiveness of advertisers’ marketing campaigns on the Sohu platform as a result of the significant expansion in our unique visitors. The top three industries in brand advertising were automobiles, fast-moving consumer goods, and real estate. The fastest growing sectors were consumer electronics, with year-on-year growth around 200%; fast-moving consumer goods with year-on-year growth of more than 120%; and the financial services, with year-on-year growth about 90%. For consumer electronics and fast-moving consumer goods, advertisers have intensified their marketing campaigns by leveraging the Olympics to capture consumer attention and enhanced brand value. For financial services, both domestic and overseas banks and other financial institutions have increased their ad spending on consumer banking products, such as credit cards and insurance products. For the third quarter, milk industry revenue was $1.7 million, representing 3% of our brand advertising revenue. After the milk scandal in China, milk companies actually continued to implement their marketing campaign as a way to restore public images. For the fourth quarter, as I mentioned before, none of our major advertisers cancelled or suspended their marketing campaigns on the Sohu portal. In contrast, advertisers from auto, real estate, and the online game industry are actually ramping up their new product launches and marketing campaigns in the fourth quarter, after avoiding the crowded advertising marketing during the Olympics. With the strong growth in unique visitors that we experienced in the third quarter, we moved up the rate card increases to October 1, 2008, that had originally been scheduled for early 2009. So with that, I would like to turn the call over to Gong Yu, our Chief Operating Officer, for a review of our website operations. Dr. Gong Yu: Thank you, Charles. Through the massive Olympic reporting period, we not only greatly enhanced our brand value and also further expanded our reporting competitiveness and expertise [inaudible]. We demonstrated our ability to provide the most authoritative, timely, comprehensive, interactive, and professional reporting on historic events far better than any of our competitors. Based on the market research of eight different third-party research institutions, such as CTR, the Center of the China Internet, iResearch, [inaudible] and a list of international [inaudible] media [inaudible] and who applied various [inaudible] and assembling techniques, Sohu outperformed its competitors in Olympic reporting on 39 performance indicators. Here are some examples -- according to CTR, 76.6% of all Chinese Internet users obtained Olympic information through Sohu's website, which was 5.6% more than the second-highest traffic website that reported on the event. According to CTR, an impressive 81.2% of all Internet users in China watched the events live on Sohu's portal. According to iResearch, 37.1% of Sohu users during the Olympics have previously been frequent users of other portals, which demonstrated our success in attracting new users to our website and [inaudible] users from our competition. According to [inaudible] Media [inaudible], 35.9% of high income Internet users selected Sohu as their first choice for portals, which is 8.7% higher than the number two portal. These are powerful results that show the strength of our brand, power of our portal, and attractiveness of our content. During the Olympic Games, daily unique visitors to Sohu's portal increased by 100% year-on-year. We are pleased to report that a large portion of these new users stayed with Sohu after the Olympic Games. During the month of September, average daily unique visitors to the Sohu portal grew by 73% year-on-year. Even for October, our average daily unique visitors is growing north of 80% year-on-year. The fastest growing channels were our homepage, news, sports, and our entertainment channels. In order to maintain the momentum of our new user acquisitions, we will continue to be innovative in developing new products and maintain Sohu's leadership position as a mainstream media portal. At this time, I would like to turn the call over to Carol, Co-President and Chief Financial Officer, for a review of Sohu's financial results. Carol.

Thank you, Gong Yu and hello, everyone. I will now provide a review of the financial results for the third quarter of 2008. Starting with the top line results, total revenues reached a record high of $120.7 million, representing an increase of 18% sequentially and 134% year-on-year. Not only did each of the revenue categories exceed our expectations but all surpassed all-time records. Total advertising revenues reached $51.1 million, as we achieved a sequential increase of 18% and a year-on-year increase of 62%. Brand advertising revenues totaled $49.4 million, representing an 18% sequential increase and a year-on-year increase of 66%. Sponsored search revenues were $1.7 million, representing a 3% sequential increase and flat with last year. Non-advertising revenues totaled $69.5 million, representing an increase of 19% sequentially and 248% year-on-year. Online games revenues were $54.6 million, an increase of 14% quarter on quarter and 330% year-on-year, due to the continued strong performance of TLBB and successful revitalization of Blade Online. For the third quarter, TLBB's revenue in Mainland China increased by 11% quarter on quarter to $48.3 million, while its overseas revenues grew 25% to $2.7 million, leaving TLBB's total revenue to $51 million. Revenue from a revitalized Blade grew to 52% to $3.6 million. Just to give some operating statistics for Blade Online as well for the third quarter, peak concurrent users of Blade increased by 11% sequentially to 82,000. Active paying accounts increased 19% sequentially to 146,000 and average revenue per user increased 25% sequentially to RMB169. Wireless revenues were $14.5 million, a quarter on quarter increase of 58% and year-on-year increase of 112%. The quarter on quarter increase was primarily because: A, our making a one-off tax provision of $2.1 million in the second quarter, which was netted against wireless revenues; and B, stabilization of wireless-related regulatory and business environment throughout the quarter. Under SFAS-123R, share-based compensation was charged to the quarter’s cost of revenue and operating expenses. Total share-based compensation expense for the third quarter was $2.6 million. We believe excluding the share-based compensation expense from our non-GAAP financial measure of net income makes a more meaningful comparison of Sohu's operational results and improves investors’ understanding of Sohu's performance, so we use non-GAAP measures in this discussion to explain margins, cost, and expense items. Non-GAAP gross margin for the third quarter was 74%, down from 76% in the previous quarter and up from 67% for the quarter of 2007. Non-GAAP advertising gross margins were 60% for the third quarter, down from 65% in the previous quarter and 64% in the third quarter of 2007. Brand advertising non-GAAP gross margins for the third quarter were 62%, down from 67% in the previous quarter and down from 67% in the third quarter of 2007. The quarter on quarter decrease was mainly due to the content costs surrounding the Beijing 2008 Olympics. Sponsored search non-GAAP gross loss margin for the third quarter was 2%, down from the gross profit margin of 6% in the previous quarter and 24% in the same period last year. The decrease was mainly due to higher server depreciation and bandwidth costs. Non-advertising non-GAAP gross margin for the third quarter was 84%, flat with the previous quarter and up from 72% in the same quarter of last year. Online games non-GAAP gross margin for the third quarter was 94%, an increase from the 93% in the previous quarter and 84% in the same period of last year. Wireless non-GAAP gross margin for the third quarter was 51%, up from the 40% in the previous quarter and down from 52% for the third quarter of 2007. The quarter on quarter increase was mainly due to the once-off tax provision of $2.1 million in the second quarter mentioned earlier. For the third quarter, Sohu's non-GAAP operating expenses totaled $42.7 million, up 21% from $35.4 million for the previous quarter and up 79% year-on-year. The year-on-year increase was primarily due to the continued investment in product development, marketing expenses for Sohu's branding, as well as an increase in bonuses to reward employees for their contribution to Sohu's good results. The quarter on quarter increase was mainly due to Olympic related marketing spending. Non-GAAP operating profit margin was 38% for the third quarter, down from 41% in the previous quarter and up from 21% in the same period of last year. For the third quarter, we incurred Olympic related content costs of $6 million and Olympic related marketing expenses of $11 million, which were charged to the cost of advertising revenue or cost of brand advertising revenue and operating expenses respectively. These costs are non-recurring for the fourth quarter and beyond and thus we expect the margin expansion in the fourth quarter. Income tax expense for the third quarter was $5 million, compared to $0.6 million in the previous quarter and $0.3 million in the same period of last year. This translates into an effective tax rate of 11%. We expect this to remain relatively stable for the rest of 2008 and increase to mid-teens for 2009. In the second quarter, we had recorded a one-time income tax reversal of $4.1 million. Non-GAAP net income for the third quarter hit a record high of $42.8 million, or $1.08 per fully diluted share. Non-GAAP net income increased by 1% sequentially, and increased 266% year-on-year. Non-GAAP net margins for the third quarter were 35% compared with 42% in the previous quarter and 23% for the third quarter of 2007. Taking out the $4.1 million income tax reversal for the second quarter, the non-GAAP net margin for the second quarter would have been 38%. We pride our selves as having a strong balance sheet with no debt and a high cash balance. As of September 30, 2008, our cash and cash equivalents were $279 million, compared to $226 million three months ago. All of our cash [is placed in] time deposits with reputable banks. For the third quarter, our businesses generated $59 million operating cash flow, a similar level as with the previous quarter, and of course we do not engage ourselves in any derivatives transactions. For our portal business, despite financial turmoil in other parts of the world, our customers credit revenues remain sound. We are happy to see brand advertising DSO for the third quarter is at 54 days, a similar level with the 52 days in the second quarter, but significantly down from the 75 days for the third quarter of last year. As of September 30, 2008, our net accounts receivable balance was at $46.5 million, an increase of $9.9 million compared with the second quarter. Our bad debt provision totaled $2.3 million, flat with 2.2 as of June 30, 2008. As always, we will continue to be prudent in monitoring credit extended to our customers. For our online games business, we are glad to see continued interest from our distribution network in our games. As of September 30, 2008, receipts in advance for our online games business was $16.7 million compared to $13.1 million as of June 30, 2008. Finally, that brings me to our business outlook -- for the fourth quarter of 2008, Sohu expects total revenues to be between $118 million and $122 million, with advertising revenues of $45.5 million to $47.5 million and non-advertising revenues of $72.5 million to $74.5 million; two, brand advertising revenues of $44 million to $46 million; three, online game revenues of $57 million to $59 million; four, we estimate non-GAAP fully diluted earnings per share to be between $1.20 and $1.25. And lastly, assuming no new grants of share-based awards, we estimate share-based compensation expense to be between $2.5 million to $3 million. The impact of this expense is expected to reduce fully diluted earnings per share under U.S. GAAP by about $0.06 to $0.07. My last two comments -- one, the third quarter of 2008 continues the string of record total revenue and record total net income Sohu's management have been consistently delivering since mid-2007. Second, management confidence in Sohu's business prospects, our strong cash position, debt-free balance sheet have led us to put in place yet another highest amount ever stock buy-back program of $115 million. This will be the third buy-back we executed over the past five years, with previous programs successfully buying back a total of 2.9 million shares. This concludes our prepared remarks for today. We will now open the floor for questions. Operator, please go ahead.

(Operator Instructions) Our first question comes from the line of Dick Wei with J.P. Morgan. Dick Wei - J.P. Morgan: Thanks for taking the questions and congratulations on a good quarter. For interest of time, I’ll only ask one question -- for 2009, what is the highest growing advertising category that you expect? Thanks.

Sorry, Dick, the line is a little bit cutting in and out. What’s your question again? Dick Wei - J.P. Morgan: Which categories will see highest growth next year -- autos or FMCG or what sectors do you expect to see sector growth? Dr. Charles Zhang: Well, from the Q3 experience, it’s fast-moving consumer -- FMCG, actually consumer electronics -- well, due to the Olympics has been doing really well in Q3. FMCG has been growing for the last few quarters. It has been among the top three fastest growing categories, so we believe that fast-moving consumer goods will continue to grow next year. The largest categories of advertising, auto and real estate, it’s really up to -- it’s not clear but -- it’s hard to say. It really depends on how the government stimulus package or the policy to stimulate domestic consumption and also the real estate market call it. But fast-moving consumer goods definitely are, will be one of the fastest growing categories.

As mentioned in our prepared remarks, up to now we don’t see any changing in the advertiser spending with us, at least, for the major categories such as autos, FMCG, as well as real estate. So maybe it’s a little early to tell into 2009 but this is everything that we are seeing today. Dick Wei - J.P. Morgan: Okay, thanks.

Thank you. Our next question comes from the line of Jason Brueschke with Citigroup. Jason Brueschke - Citigroup: Thank you. Good evening, everyone. Congratulations on the quarter and thank you all very much for your thorough prepared remarks. I have two questions both about advertising -- the first involves the budget shifts between offline and online and the second involves pricing. In terms of the budget shift, there’s clearly a long-term trend going on in China as well as around the world from budgets going from traditional media to online media, and my question is do you think that that trend will materially accelerate in 2009 versus the rate of that trend that you saw in 2008? And could you maybe give us some maybe anecdotal examples based upon your preliminary discussions of where an advertiser is planning to spend materially more online with you guys versus what they did in ’08? And then my second question involves pricing -- you indicated that you are moving your price increases up to I believe October 1st. Could you, Carol, maybe discuss the dynamics around the pricing environment that you face? Clearly you have significantly more traffic. You have a much stronger brand as a result of the Olympics and then there is this budget effect issue that we just talked about. And my question is can, in discussing the dynamics, do you believe that your ability to increase your pricing in 2008 positions -- sorry, in 2009, do you believe that it positions you to probably make up from any potential weakness that you may find from maybe one or two particular categories, such as, for example, if real estate is weak, your ability to increase pricing across all your other verticals more than makes up for that in terms of revenue. If you could discuss the dynamics, that would be helpful. Thanks. Dr. Charles Zhang: First of all, generally speaking for the shift of offline to online, I can only qualitatively describe. Basically first of all, the Internet penetration in China has reached a critical mass. I think it is probably now at the 300 million mark, so it represents quite a large portion of the high income population in China. So the Internet became from in the past only as an additional media to now a mainstream media that if anything happens, you always need to use the Internet. And this media presence of the Internet in China are more dominant or more stronger than the equivalent in the U.S. because in the U.S., traditional media are quite strong, competitive and the Internet media can only seek some new path or new business models. But in China -- so through the 2008, there are a number of events. As I mentioned, the Olympic torch relay, the Mount Everest ascend of the torch and the earthquake, and also Olympic events in Beijing and also the Chinese space shuttle -- all these important events, the Internet has played a much stronger role, even compared with 2007. So we do see that it is a choice, that’s why advertisers, they have to -- I mean, before it’s only an additional allocation to just make their marketing more complete. But now it seems that they have to rely on it, that’s why it’s a general trend that has been I think not -- it’s accelerating but it’s really growing fast, this trend. Jason Brueschke - Citigroup: Great, thanks, and regarding the pricing?

On the pricing side, up until now I have been talking to the street that everything we are seeing, I would just use three words to conclude that it’s business as usual. So to start with, we are not seeing any weaknesses yet in the real estate sector, and in fact it’s a very good and typical example of shifting offline to online as we see, even as the real estate developers are having a smaller budgets, they are seeing Internet advertising is more effective than before, so we are not seeing that but going back to your question on pricing, we are not seeing any push-back from the advertisers yet and we are -- the pricing really reflects what we have been talking about is a higher and stronger, a more influential media with a higher user base and -- this is the first factor and the second factor is a more effective marketing because the results are directly measurable. So -- Dr. Charles Zhang: I think the brand also played a role because after the Olympics, Sohu enjoyed a better branding and also people view Sohu as a platform of premium content that you have to -- really have opinions, have good views, you have to go to Sohu. That’s because of the premiere position we can ask for a better price. Jason Brueschke - Citigroup: Perfect. That’s helpful, that’s exactly what I needed. Thank you.

Thank you. Our next question comes from the line of Wallace Chung with Credit Suisse. Wallace Chung - Credit Suisse: Good morning. Congratulations on a great quarter. Just a quick question I think on -- Charles, recently you have made comments to some [inaudible], talk about some potential interesting acquisitions, sort of a target in the China market. Can you give us a little bit more color on your future plans in terms of M&A? Thank you. Dr. Charles Zhang: Well, actually the world is really getting smaller and transparent. Actually I think first of all, I think that article is not exactly what I said, so it’s really -- so I think you should disregard that article because I didn’t say that Sohu will do, you know, really start acquisition spree, right? So I was talking generally about investment about, you know, some good opportunity to buy some cheap things, and maybe myself or maybe the company or maybe whatever. So I really didn’t specifically say about Sohu's acquisition, so disregard that article. But in terms of acquisition, it is with our cash position and with this basically venture capital and everything are backing off and people are asking [inaudible], so there is some -- probably some good candidates out there and we will basically to launch our radar and to look for them. But there’s no specific plans right now but we do -- it’s a logical thinking, so we are looking into this.

So Wallace, as a general advice, read Sohu IT in order to get the correct news. Thank you. Wallace Chung - Credit Suisse: Thank you very much.

Thank you. Our next question comes from the line of Eddie Leung with Merrill Lynch. Eddie Leung - Merrill Lynch: Good evening, everyone. I have a couple of questions. To start with, could you give us an update on the number of brand advertisers for the quarter, as well as more color on the major advertiser categories and the growth areas -- perhaps some numbers would be helpful. Thanks.

Number of advertisers, it increased slightly from Q2. It’s still in the -- it’s closer to 700 as of -- for the quarter, the third quarter of 2008 as compared to 650 for Q2. And regarding the categories, I think Charles has done it in his prepared remarks. The top three industries remains automobiles, FMCGs, and real estate, and the fastest growing is consumer electronics, FMCGs, and financial services. Eddie Leung - Merrill Lynch: But there would not be any say rough percentage of contributions and growth rates, right?

We typically tell the street that -- because doing a quarter is very misleading, so we did say that the top three industries, the three that I just mentioned, account for between 50% to 60% of our total brand ad revenues. Eddie Leung - Merrill Lynch: Understood. And my next question is more on the online games sector. If things like online games didn’t show up as the top categories in the third quarter. Should I assume it’s only because of the Olympics and there were not many game launches, and the growth actually, the visibility on that sector is actually pretty good in the fourth quarter?

Yes. Eddie Leung - Merrill Lynch: Okay. Thank you.

Thank you. Our next question comes from the line of Tian Hou with Pali Capital. Tian Hou - Pali Capital: Good evening. Congratulations on a good quarter. I have a couple of questions. The first one is for [Gong Yu] -- would you please give me some color on the new game pipeline? And remember last quarter earnings and you guys said you were going to have a bigger testing for Duke of Mountain Deer. I just wonder how the game is going. That’s my first question. I will have a follow-up question after you give me the answer.

Charles had mentioned that we started the technical closed beta for our newly licensed game, Immortal Faith, and Duke of Mountain Deer’s closed beta is on track, so we don’t have much more to add. Tian Hou - Pali Capital: Is it still -- are you guys still going to have a closed beta in Q4?

Yes. Tian Hou - Pali Capital: Okay. The second question is regarding wireless value-added services. So wireless value-added services in Q4, it seems like on a very steady trend, Q3 on a very steady trend of growth, so I was just wondering, what do you see the future in this area, a future trend in this area? Dr. Charles Zhang: In the future, wireless value-added service will basically stabilize and then grow, but probably not as fast as -- yeah, it will grow but third quarter it definitely grew faster but normally -- it will continue to grow. Tian Hou - Pali Capital: Okay. The next question is about the tax rate -- in Q4, [inaudible] we see a huge tax increase. I understand where they come from and so what about going forward -- how should we model the tax rate?

You mean Q3, you have a big tax increase? Are you referring to Q3? Tian Hou - Pali Capital: Yeah, in Q3 the tax is the $5 million. I understand it’s because of the reversal, so going forward --

Yeah, the reversal for the previous quarter, so the previous quarter looks low. So Q3 is a normalized quarter, so we did say that the tax rate of 11% will remain for the rest of the year until the end of the year and starting ’09, we expect it to be in the mid-teens. Tian Hou - Pali Capital: Okay, that’s great. Thank you. That’s all my questions.

Thank you. Our next question comes from the line of Victor Tseng with Deutsche Bank. Victor Tseng - Deutsche Bank: Thank you for taking my call. I have a specific question on TLBB -- so we have amassed active paying accounts of 1.68 million as of third quarter. I just want to get a sense of how much this gamer base is driving the bulk of the games revenue -- what is the percentage of APA making up say 80% of this game’s revenue?

We don’t give out that data. Victor Tseng - Deutsche Bank: I know from like an industry trend, it’s more skewed towards say like 10% of the APA generally generates the bulk of the online games revenue, so from that perspective, if the economy continues to deteriorate, do you see ARPU spend kind of getting affected eventually or how -- what is our sense in this respect?

We don’t give out specific metrics like the ones that you just mentioned but I would say that ours would be a lot less skewed than what you have just mentioned, and you can see from our ARPU, we are actually working very hard, like what Charles has said, we are trying to keep ARPU flat and growing revenue by growing users. Victor Tseng - Deutsche Bank: Okay. All right, thank you.

Thank you. Our next question comes from the line of Richard Ji with Morgan Stanley. Richard Ji - Morgan Stanley: Charles and Carol, thanks for taking my call and it’s a great quarter. One question -- actually you have clearly benefited substantially from your official Olympics sponsorship which helped both the online traffic and also your brand awareness. Given that the Olympics are over, I’m just curious about your long-term content strategy -- how will you differentiate yourself from a content perspective and those of your major competitors, and what will be the perceived cost commitment to develop a differentiated content? Thank you. Dr. Charles Zhang: First of all, the basics, the -- continue to provide the best news because our world is becoming so volatile in every sense. There are so many events every day, every month, so reporting, best reporting, quality content and as we demonstrated over the past year, you know, the report about the earthquake, the space shuttle, all these things, Sohu has been really up front. And also working with definitely the technology side to continue to deliver the best, fastest system and download speed and also the user generated content, the Sohu blogs continue to generate quality opinions and quality views. And these are the basics. And then there’s the additional efforts in the new areas, which is video, so we have a good -- a very good experience with video reporting during the Olympics. For example, the CCTV, the broadcast, the live broadcast of the Olympics and also the original content, Sohu entertainment reports and Sohu Beijing report. So on the video front, and also working with over 100 television stations and so these are the important areas, which actually the video advancement, the video development also actually bring new opportunities for brand advertising because the traditional TV advertisers will actually shift some of the allocation to online video. So this basically -- basically it’s just continue to do good, you know, do things -- and then with some vertical industries, like auto industry and health and fashion industry, to provide deep reporting, reporting of [inaudible] and also industry-specific services and all these. So this is really a whole new comprehensive, systematic management. Really it’s the whole thing -- it’s really, really compete on all fronts rather than only one thing. Richard Ji - Morgan Stanley: Understood. That’s very helpful. Dr. Charles Zhang: And of course I think worth mentioning is our desktop strategies, which is the Sogo Pinyun method which already occupies 50% of the Chinese PC, would also represent some opportunities for our content platform and also for our Sogo search, which we are not giving up. Richard Ji - Morgan Stanley: Thank you, Charles.

Thank you. Our next question comes from the line of Ming Zhao with SIG. Please go ahead. C. Ming Zhao - Susquehanna Financial Group: Thank you for taking my questions. Good evening. I have two questions here -- first, Carol, can you give us a rough breakdown of the Olympic related costs and expense during 3Q? And obviously the aggregate amount as well. The second question is based on your observations so far, actually your DSO has come down quite significantly. So in the 3Q, have you seen any slow-down in spending in real estate and how the collection, the cash collection of the real estate advertising go in the third quarter? Thank you.

I did mention in the prepared remarks that we have cost of $6 million that go into cost of revenue, Olympic related content cost, and $11 million mainly goes into the sales and marketing line, which is under operating expenses. So it’s an aggregate amount of $17 million Olympic related expenses. That’s the first question. The second question, as I mentioned in my call, that we are very closely monitoring all accounts and we haven’t seen anything that would surprise us or worry us in that respect. So like what Charles has said, I think we are in a lucky world, that we are more sheltered than the rest of our counterparts in other parts of the world that we actually haven’t felt the pain, at least not up until today. C. Ming Zhao - Susquehanna Financial Group: So you said the $11 million is in the sales and marketing expense -- what about the product and development? Did you incur any costs over there? Because it seems there’s an increase quarter over quarter.

That would be very minimal, if any. The bulk of the Olympic related expenses will be marketing and content. C. Ming Zhao - Susquehanna Financial Group: Okay. Thank you very much.

Thank you. At this time, I would like to turn the conference back over to Ms. Piacente for any closing remarks.

We would like to thank everyone for participating in today’s call. Please feel free to contact us with any additional questions that you may have. Thank you.

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