Brandi Piacente – IR, The Piacente Group, Inc. Charles Zhang – Chairman & CEO Belinda Wang – Co-President and Chief Marketing Officer Carol Yu – Co-President & CFO

Jason Brueschke – Citigroup Dick Wei – J.P. Morgan Eddie Leung – Merrill Lynch Paul Keung – Oppenheimer Kathy Chen – Goldman Sachs Ming Zhao – Susquehanna

Ladies and gentlemen, welcome to the Sohu fourth quarter and full year 2008 earnings conference call on the 9th of February 2009. Throughout today’s recorded presentation, all participants will be in a listen only mode; after the presentation, there will be an opportunity to ask questions. (Operator instructions). I will now hand the conference over to Brandi Piacente, Investor Relations. Please go ahead.

Thank you for joining Sohu.com to discuss our fourth quarter and full year 2008 results. On the call today are Chairman and Chief Executive Officer, Dr. Charles Zhang; Co-President and Chief Marketing Officer, Belinda Wang, Co-President and Chief Financial Officer, Carol Yu; Vice President of Online Games, 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 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 market crisis and its potential impact on the Chinese economy, the slower growth the Chinese economy experienced during the latter half of 2008, which could continue into 2009; uncertain regulatory landscape in the People’s Republic of China, fluctuations in quarterly operating results, and the company’s reliance on online advertising services, online game services, and wireless value added services. Most wireless revenues are collected from a few mobile network operators 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?

Thank you, Brandi. Hello, everyone, and thank you for joining us today. We are pleased to report another strong quarter of financial results. The fourth quarter of 2008 marks our sixth consecutive quarter of record total revenues and record net income. This is particularly impressive as it follows Sohu’s outstanding third quarter 2008 results which reflect the company's many achievements surrounding the Beijing 2008 Olympics. For the fourth quarter of 2008, our total revenues grew by 1% quarter on quarter and 86% year-on-year to US$121.6 million. Brand advertising revenues seasonally decreased by 9% quarter on quarter but increased 40% year-on-year to $45 million. Online game revenues reached $58.4 million, an increase of 7% quarter on quarter, and 144% year-on-year. Non-GAAP net income was $59 million, or US$1.5 per fully diluted share, up 38% quarter on quarter and 249% year-on-year. Excluding one-time income tax adjustments totaling $6 million, our non-GAAP net income would have been $53 million, representing a 24% quarter on quarter growth. Our Co-President And Chief Financial Officer, Ms. Carol Yu will discuss the tax adjustments in more detail later on in this call. For full year 2008, total revenues were US$429.1 million, representing an increase of 127% from $188.9 million in 2007. Brand advertising revenues grew 51% year-on-year to $169.3 million, significantly exceeding the high end of our guidance of 45% growth. Online game revenues increased to $201.8 million, which was almost five times of our 2007 game revenues. Non-GAAP fully diluted earnings per share totaled $4.29, compared with $1.12 in 2007. Non-GAAP operating margins for the full year 2008 was 41% compared with 22% in 2007. Non-GAAP net income increased to 39% for 2008 compared with 23% in 2007. During the fourth quarter of 2008, the company repurchased 501686 shares of its common stock under the $150 million repurchase program approved by the Board Of Directors in October 2008. Of note, the company ended the year with a strong balance sheet. As of December 31st, 2008, Sohu had no debt, and a significant cash balance of US$314.4 million. This represents a considerable increase of hundred $191.7 million from $122.7 million as of December 31, 2007. Now I would like to make a few comments on the macroeconomic trends and update you on the Internet industry in China. The Chinese government has been implementing a series of economic stimulus programs to offset the adverse impact of the global economic crisis on China's economy, such as interest rate cuts and tax relief initiatives, designed to encourage consumer spending and increased investments in infrastructure. So far, these measures have demonstrated positive results. For example, domestic sales of consumer goods increased 13% year-on-year during the three day New Year holiday and 13.8% year-on-year during the seven-year Chinese New Year holiday last month according to a recent report published by the Ministry of Commerce. The research bureau of People's Bank of China also recently declared that China expects to enjoy decent GDP growth of around 8% in 2009. Additionally, our Premier Mr. Wen Jiabao is optimistic that China will be the first country to recover from the global economic downturn according to remarks he made on January 9. Now turning to the growth of the Chinese Internet industry, China has the largest population of Internet users in the world, and this population continues to grow at an accelerated rate. According to a statistic survey released on January 13 by the China Internet Network Information Center, CNNIC, the number of Internet users in China jumped nearly 42% year-on-year to 298 million people at the end of 2008. In addition, China’s Internet penetration rate increased to 22.6%, up significantly from 16% at the end of 2007. These levels in China is still much lower than the penetration levels in the other countries, such as the US and other developed countries in Asia. In addition, according to Ratinc [ph], a third party research firm, the average amount of time Internet users spend online increased 20.6% in the fourth quarter of 2008. Due to the significant growth and reach of Internet in China, advertisers continue to shift more of their advertising budgets from offline to online media to maximize the efficiency and the effectiveness of their market campaigns and directly measure results. What is even more important in a restrained budgetary environment for the Internet industry as a whole, the shift in advertisers budgets from offline to online will outweigh the reduction in budgets in some industries due to the economic weakness. In addition, advertisers tend to concentrate their spending on leading Internet portals such as Sohu, rather than our other smaller sites due to the Internet portal’s vast user base and proven results. This industry dynamic is obviously favorable to our company. Through successful execution of our Olympic strategy and the nationwide marketing campaign, we raised brand awareness for Sohu and attracted and retained new users for our portal at a faster pace. During the fourth quarter of 2008, unique visitors increased by 82% compared to the same period last year. In 2008, we gained significant traction in both users and brand advertising revenue, which has enhanced Sohu’s position as a market leader. Our combined approach of offering differentiated content, innovative and cutting-edge technological products, as well as a successful execution of our media strategy has elevated Sohu to a highly influential and dominant online platform. For example, on January 6 and 8 of this year, we hosted the Sixth China New View Forum in Beijing, covering hot topics, including economic issues, government policies and entertainment rankings [ph]. Speakers for the program included more than 60 economists, government officials and the senior business leaders in China. More than 200 media (inaudible) reported the event and our web traffic exceeded 100 million page views during the two days of the forum. This event was China's and Sohu’s most influential online media forum to date and is another example that demonstrates Sohu’s ability to capture the most elite events happening online. In a moment Belinda will provide a review of our brand advertising business in detail, but first let me briefly discuss our online game business. Online game business is more resilient to global financial crisis as it mainly comprises small ticket consumption items for the players. In the fourth quarter of 2008, our business continued to perform well. As a result of our ongoing in-house development efforts combined with our focus on enhancing users engaging experience, Sohu Online revenue – online game revenues increased 7% quarter on quarter and 2.4 times that of fourth quarter 2007 to $58.4 million. While Tian Long Ba Bu is maturing in our domestic market with 7% quarter on quarter growth, we're pleased to see that a revitalized Blade Online continued to demonstrate sustainable growth. Revenue from Blade Online grew 35% quarter on quarter to $4.9 million. Now let me talk about Tian Long Ba Bu. This quarter, Tian Long Ba Bu, TLBB, entered its seventh quarter of commercial operations. The game continues to attract new users and performed well in China's competitive online gaming market. Revenues from Tian Long Ba Bu in Mainland China increased 7% quarter on quarter to reach a new record high of $51.5 million in the fourth quarter of 2008. This was mainly due to our continued investment in the game’s development to the development of expansion packs and other high quality enhancements. With a strong focus on expanding our user base, this quarter we further developed Tian Long Ba Bu’s free of charge playing features. We were pleased to see all of our registered accounts and the peak concurrent users, PCUs, showed solid growth. As of December 31, 2008, registered accounts of Tian Long Ba Bu increased 14% quarter on quarter from 39.4 million in the third quarter 2008 to 44.7 million in the fourth quarter. Moreover, the peak concurrent users increased from approximately 700,000 in the third quarter to 740,000 in the fourth quarter, reaching a new record. The number of active paying accounts in the fourth quarter was 1.82 million or flat with the prior quarter as some of our previous low spending users became non-paying users due to their satisfaction with the enhanced free of charge playing features. Newly launched virtual items were well received by Tian Long Ba Bu gamers. And average revenue per user value increased to 193 RMB in the fourth quarter compared to 178 RMB in the third quarter, still within the limit of gamers’ affordability and in line with the industry average. In January 2009, momentum of Tian Long Ba Bu continued with monthly APAs, active paying accounts, of 1.25 million, up from 1.16 million for the month of December 2008. In addition, our next expansion pack will be launched in March 2009. Despite the negative impact of Chinese New Year on the industry wide game usage, we expect revenues in the first quarter of 2009 from domestic operations of Tian Long Ba Bu to be flat quarter on quarter. Revenues from overseas markets of Vietnam, Taiwan and Hong Kong totaled $2 million in the fourth quarter. To further expand our overseas business, we signed contracts to export Tian Long Ba Bu to Malaysia and Singapore in the fourth quarter, and we expect to launch and begin generating revenues in these countries in the second half of 2009. We plan to further penetrate other overseas market on a selective and opportunistic basis. Now let the talk about Blade Online. Since the launch of Blade’s major expansion pack in June 2008, we continue to see Sohu’s four year old game gaining strong momentum. In the fourth quarter of 2008, peak concurrent users on Blade Online achieved another record high of 95,000 users, with the increase in revenues of 35% quarter on quarter to reach $4.9 million. Revenue growth was driven by both active paying accounts, APA, and ARPU value. APA increased 9% quarter on quarter and 8% year on year to 159,000. ARPU value increased 24% quarter on quarter and 109% year-on-year to 209 RMB. We plan to launch the second major expansion pack for Blade Online in the second quarter of 2009, which is expected to drive more growth. Now let me talk about game pipeline. The development work remains on track for or new in-house developed game Duke of Mountain Deer or DMD and two new licensed games, Immortal Faith or IF and Legend Of The Ancient World or LAW. In late December 2008, we commenced technical close beta testing for the DMD, Duke of Mountain Deer, and we're making improvements to the game based on our user feedback. We expect to take six to nine months to further develop the game and complete closed beta testing. We plan to start open play testing of DMD in the fourth quarter of 2009 and expect revenue contribution in the same period. Immortal Faith entered a technical closed beta testing in September 2008. We anticipate open beta testing to begin in the middle of 2009. As planned, the Legend Of Ancient World is expected to enter technical close beta testing mid 2009 and open beta testing early 2010. Looking ahead, despite the softening of Chinese macro economy, we anticipate online game revenues to resume quarter on quarter growth by mid-single digits from the second half – second quarter of 2009 onwards. Thank you for your attention. I would like to turn the call over to Belinda Wang, our Co-president and Chief Marketing Officer for a brief discussion of our progress in Sohu’s brand advertising business. Belinda?

Thank you, Charles. We are pleased to report another strong quarter of brand advertising revenues representing 40% year-on-year growth to US$45 million. Full-year brand advertising revenues were US$159.3 million, up 51% year-on-year. Advertisers were extremely satisfied with Sohu’s outstanding performance during the Olympic Games and their spending patterns continued in the fourth quarter due to Sohu's position as one of the strongest online advertising platforms in China. Things at our portal business remained healthy during the fourth quarter despite global economic weakness. The year-on-year increase in brand advertising revenues was powered by the continuation of the fundamental trends in online spending, including the continued shift of advertising budgets from offline to online and the overall effectiveness of advertisers marketing campaigns on Sohu’s platforms. Sohu recognized as the cost effective portal for launching marketing campaigns and there is a large and growing awareness that advertisers choose Sohu in order to maximize results from their online programs. The top three industries in brand advertising during the fourth quarter 2008 were automobiles, online games and real estate. These three industries accounted for over 50% of the total brand advertising revenues, up from over 40% in the third quarter. Many advertisers automobiles, online games and real estate ramped up their new product launch and marketing campaigns in the fourth quarter, after avoiding the crowded advertising marketing space during the Olympic Games. The fastest advertising growth in the fourth quarter came from online games with year on year growth over 55% due to strong demand in the industry across China. We are negotiating with advertisers for their 2009 budget allocations to Sohu. It is too early to comment on expected brand advertising revenues growth for full year 2009. However, we can provide additional visibility into some of the key business drivers. First, we believe automobiles will continue to be a top industry in 2009. New car models coming into the market this year are expected to reach the same level in the year of 2008, we anticipate an increased shift in auto manufacturers advertising budget from offline to online, and we expect online marketing spend with Sohu to reflect this trend. Second, we expect that real estate will continue to perform well in 2009 and I feel optimistic about this year's revenue growth in this segment. Although the first quarter is seasonally a slow quarter for real estate in China, the Chinese government has already implemented stimulus measures such as interest rate cuts and tax relief incentives to stabilize the real estate market and to spur property transaction volumes. We expect industry sales will be back end loaded in 2009 with more growth in the second half of this year. And third, we expect to continue healthy revenue growth in the fast-moving consumer goods as this industry is less affected by economic slowdown. And the fourth, some transitional industries, which substantially rely on offline sales channels began to move online to establish their own e-commerce platforms. We expect these industries to allocate additional advertising budgets to promote their brand online, and claims more users to their own e-commerce platforms. And the fifth, we are receiving orders from advertisers for the first quarter 2009 based on current orders received and our near term visibility, we expect 18% to 24% year-on-year brand advertising revenue growth in the first quarter 2009. Thank you for your attention. And with that I would like to turn the call over to Carol Yu, our Co-president and Chief Financial Officer, who will review Sohu’s financial results.

Thank you, Belinda, and hello everyone. I will now provide a review of the financial results for the fourth quarter of 2008. One, revenues. Starting with the top line results, total revenues reached a record of 121.6 million, representing an increase of 1% sequentially and 86% year-on-year. Advertising, total advertising revenues reached 46.6 million, representing a sequential decline of 9% and a year-on-year increase of 38%. Brand advertising revenues totaled $45 million representing a sequential decline of 9% and a year-on-year increase of 40%. Sponsor search revenues were 1.6 million, representing a sequential decline of 6% and a year on year increase of 6%. Non advertising revenues, non advertising revenues totaled 74.9 million, representing an increase of 8% sequentially and 137% year-on-year. Online games revenue totaled 58.4 million, an increase of 7% quarter on quarter and 2.4% times that of fourth quarter of 2007 due to continued strong performance from TLBB and the successful revitalization of Blade Online. For the fourth quarter, revenues from TLBB in Mainland China increased by 7% quarter on quarter to 51.5 million while overseas revenues were 2 million, bringing TLBB's total revenues to 53.5 million. Revenues from Blade Online grew 35% quarter on quarter to 4.9 million. Wireless revenues were 14.8 million, a quarter on quarter increase of 2% and twice that of fourth quarter 2007. As a result of tighter regulatory environment, we expect wireless revenues for the first quarter of 2009 to decrease by roughly $1.5 million to $1.8 million. Two, gross margin. Under SFAS 123R, share based compensation expenses were tied to the quarter’s cost of revenues and operating expenses. Total share based compensation expenses for the fourth quarter were 2.4 million. We believe excluding the share based compensation expense from a 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 the discussion below to explain margin cost and expense items. Non-GAAP gross margin for the fourth quarter was 75%, up from 74% in the previous quarter, and up from 72% in the fourth quarter of 2007. Non-GAAP advertising gross margin was 67% for the fourth quarter, up from 60% in the previous quarter, and flat compared with the fourth quarter of 2007. Brand advertising non-GAAP gross margin for the fourth quarter were 67%, up from 62% in the previous quarter, and flat with the fourth quarter of 2007. The quarter on quarter gross margin improvement was mainly due to Olympics related content cost of $6 million in the third quarter, which were charged to the cost of brand advertising revenues. Sponsor search non-GAAP gross margin loss for the fourth quarter was 18% compared with compared with sponsor search gross margin loss of 2% in the previous quarter, and gross profit margin of 12% in the same period last year. The quarter on quarter increase in gross margin loss was primarily due to higher server depreciation and bandwidth expenses. Non-advertising non-GAAP gross margin for the fourth quarter was 80%, down from 84% in the previous quarter and up from 79% in the same quarter last year. Online games non-GAAP gross margin for the fourth quarter was 93%, slightly down from the 94% for the previous quarter and up from 88% for the same period of last year. Wireless non-GAAP gross margin for the fourth quarter was 46%, a decrease from 51% in the previous quarter, and 56% in the fourth quarter of 2007. Three, operating expenses. For the fourth quarter of 2008, Sohu’s non-GAAP operating expenses totaled 39.6 million, down 7% from 42.7 million in the previous quarter, and up 32% year-on-year. The year-on-year increase was primarily due to the continued investment in product development, marketing expenses for Sohu’s branding, and increase in bonuses to reward employees for the contribution to Sohu’s strong performance. The quarter on quarter decrease reflects high Olympic related marketing spend in the third quarter. Four, operating margin. Non-GAAP operating profit margin was 40% for the fourth quarter, up from 38% in the previous quarter, and 26% in the same period of last year. The quarter on quarter improvement in the operating margin reflects Olympic related marketing expenses of 11 million incurred in the third quarter of 2008, which were charged to operating expenses. Five, income tax expense. On January 1, 2008, new Chinese corporate income tax law went into effect. During the second quarter of 2008, Sohu’s subsidiaries engaged in online games business in China gained qualification as soft enterprises and enjoyed exception of income taxes for 2008 accordingly. For Sohu’s subsidiaries in China engaged in the company's portal business, for the first three quarters of 2008, Sohu assumed that no tax benefit would apply and accounted for income tax expenses based on the statutory rate of 25% due to the uncertainty regarding, A, whether they would qualify as new technology – new high-technology enterprises under the new law and, B, whether they would be on titled to grandfather treatment to recognize the remaining tax holidays under the previous legislation. Accordingly, income taxes totaling $11 million were accrued during the first three quarters of 2008. In December 2008, those subsidiaries were re-affirmed as having qualified as new high-technology enterprises under the new law. Therefore, during the fourth quarter of 2008, the 11 million of income tax accruals were reversed, and no further income taxes were recorded for those subsidiaries for that period. For 2009, for both our portal and online games business, we expect the effective tax rate to be in the low teens. Additionally, in the fourth quarter of 2008, Sohu accrued a 5% withholding income tax of approximately 5 million in relation to certain dividends declared by one of the company's subsidiaries in China to its immediate holding company in Hong Kong. As a result, the net one-time income tax adjustment in the fourth quarter resulted in a reversal of $6 million and the net income was increased accordingly. Six net income. Non-GAAP net income for the fourth quarter hit a record high of $59 million, or $1.50 per fully diluted share, representing an increase of 38% sequentially, and 249% year-on-year. Excluding the $6 million one-time tax adjustments, non-GAAP net income would have been $53 million or 1.35 per fully diluted share, which exceeds the high end of our guidance of $1.25 for the quarter. Seven, net margin. Non-GAAP net margin for the fourth quarter was 49% compared with the 35% in the previous quarter and 26% in the fourth quarter of 2007. Excluding the 6 million one time income tax adjustment that we booked, non-GAAP net margin for the fourth quarter would have been 44%. Eight, balance sheet and cash flow position. As of December 31, 2008, our cash balance was $314.4 million compared to 279.4 million as of September 30, 2008. All of our cash is either on demand or in time deposits in reputable banks. For the fourth quarter, our businesses generated 60 million in operating cash flow compared to 59 million in the third quarter of 2008. As of December 31, 2008, our net accounts receivable balance was 36.9 million, a decrease of 9.6 million from the previous quarter. Brand advertising DSO for the fourth quarter continued to improve to 45 days compared 54 days in the third quarter and 53 days in the fourth quarter of 2007. As of December 31, 2008, our bad debt provision totaled 2.1 million with bad debt expense of only $40,000 recorded for the fourth quarter of 2008. As of December 31st, receipts from our online games business was 15.4 million compared to 16.7 as of last quarter. The decrease was the result in Coincard distributors accumulating more cards at the end of the third quarter in anticipation of the golden week holiday during the period of August 1 to August 7. Nine, stages of share repurchase program. Under the 150 million share repurchase program approved by our Board Of Directors in October 2008, we purchased 501,686 shares in the open market at an average price of 39.86 for a total consideration of $20 million during the fourth quarter. These purchases speaks to management great confidence in Sohu’s business and growth prospects and we will continue to execute this program on an opportunity basis during 2009. Ten, finally, that brings me to our business outlook. For the first quarter of 2009. Sohu expects, one, total revenues to be between 111.5 million to 115.5 million with advertising revenues of 40.5 million to 42.5 million and non-advertising revenues of 71 million to 73 million. Two, brand advertising revenues of 39 million to 41 million. Three, online games revenues of 58 million to 60 million. Four, we estimate non-GAAP fully dilutive earnings per share to be between $1.05 and $1.10. And five, lastly, assuming no new grants of share based awards, we estimate share based compensation expense to be between $2 million to $2.5 million. The impact of this expense is expected to reduce fully diluted earnings per share under US GAAP by about US$0.05 to US$0.06. The results for fiscal 2008 speaks for themselves. With revenues of 2.3 times that of 2007, non-GAAP net income 3.9 times that of 2007, non-GAAP operating margin expanding to 41% in 2008 from 22% a year ago, and our cash balance increased by 191.7 million. These results also speak for our belief that management will have the ability to capture opportunity as they arise, notwithstanding the more challenging economic environment expected during 2009. This concludes our prepared remarks for today. Before I open the floor to questions, I would like to introduce new Head Of Investor Relations, Helen Zhang. Helen joins Sohu at the beginning of February and comes to us with former IR experience from China Unicom, China Techfaith Wireless and Baidu.com. We're very pleased to have her join our investor relations team. Operator, please go ahead.

Thank you. (Operator instructions). The first question comes from Jason Brueschke from Citigroup. Please state your question. Jason Brueschke – Citigroup: Great. Thank you. Good evening everyone, and congratulations on really a fantastic year. Carol and Belinda, the first question I have is on brand advertising and then I have one on the games. When I look at the guidance that you have given and I hear the prepared remarks, there seems to be a number of moving parts and I wonder if you could comment on, on the one hand, Q1 is seasonally the weakest quarter for advertising. But at the same time a year ago, you did not have as much Olympic related advertising, and yet as the year progressed in 2008, you had more and more Olympic advertising, and thus it seems like to me the comp, in terms of your year over growth, could get more challenging as 2009 goes on. At the same time, Belinda mentioned that orders, and I think especially real estate advertising likely will be back end loaded, that may be offsetting some of the Olympic effect. And I guess the question is the year-on-year growth that you have got in Q1, is that going to be – do think that’s going to be one of the strongest quarters of the year, is it going to be – or shall I say – it’s going to be one of the weaker quarters and we expect the year over growth to actually accelerate as the year goes on? That's the first question.

Jason, we're not giving our full-year guidance yet. I will just let Belinda take that question, but we're not giving out full-year guidance yet. Wait until we finish signing up our annual framework contract, when we do our Q1 call. Jason Brueschke – Citigroup: Okay, fair enough.

Jason, as Carol explained, we are in the process of negotiating with the advertisers on the annual framework, so it is still too early to comment on the full year revenue growth. But talking about the first quarter revenue, I think because of the economic weakness, some companies will be cautious about the marketing budget spending for 2009. So this also reflects in first quarter. So especially those companies in real estate, automobile, PC, housing apparatus, online games. However, I think what with our make efforts is that we will try to lead them to a bigger portion of their marketing budget online based on the bigger user base, based on the better user efficiency and cost effectiveness.

Shift to online. Jason Brueschke – Citigroup: Okay, thanks.

Also at the same time, the company's FMCG and pharmaceutical will be less affected by the economic slowdown. So we – they will invest more budget online. Jason Brueschke – Citigroup: Understood. I appreciate that. Let me – just a quick question on the online games business, specifically with TLBB. You’ve indicated that you have – because you guys have done enhancements to the free to play aspects of the game and in the prepared remarks you indicated that some of the marginal or the low-paying players have now opted for free. When we think about the various metrics, it looks like you have increased the total number of players, which my guess is it bodes well for the future, and that the average revenue per paying customer has gone up nicely sequentially, but the total number of playing customers actually was flat, and I assume that because the total number has kind of – well some of them have shifted to free to play. And the two questions I have within this are, should we expect the APA to actually increase going forward as a result of this free enhancement? And then secondly, can you tell is, right now as of Q4, did you have any material revenue concentration within the APA? The average you said is 193 RMB and my question is, is the mean materially higher or is there any type of 80-20 rule going on within the APA? Thanks.

The question on APA is like what Charles explained in his script that the APA was flattish in Q4 because we introduced– we made some of the previous paying items to be free. But as we continue to make the game more sticky, and introduce new items instead, we actually saw APA going up if we compare the month of January to the month of December. So that was in the remarks as well. And your question regarding – we're actually also seeing the month-to-month outlook going down, which we see as getting very healthy. Regarding your concentration of high-paying customers, we actually saw a lowering of the of spending by higher paying customers and the lower paying customers actually spending more. So we're actually seeing the structure becoming more and more healthy. I think we should be now be much – we are doing better than the 20-80 rule. Jason Brueschke – Citigroup: Great, thanks. That's exactly what I was looking for and congratulations again.

Thank you.

The next question comes from Dick Wei from J.P. Morgan. Please state your question. Dick Wei – J.P. Morgan: Hi. Congrats on the good quarter and thanks for taking my question. First question again on advertising, I guess you guys didn’t give out guidance for 2009, but is it possible to give more color on the current situation of brand advertising? For example the dollar amount of the framework contract signed versus last year, just the – is the advertisers attitude become more constructive after Chinese New Year, and what type of kind of rate cut increases do you expect for 2009? That would be great.

Belinda is frowning because she said – she felt she has entered that. But I actually asked her before the call started. I think to us it is more business as usual. The progress and everything that we have been seeing this year is very similar to previous years. We are not seeing major delays in terms of advertisers committing their budgets, because they need to do the businesses themselves as well. But for some of the industries, we actually expect more backend loaded such as real estate as we previously explained. Dick Wei – J.P. Morgan: Right, great. And then the second question I have is in terms of the cost side, Do you know what kind of margin trends for game advertising you expect to see for the rest of the year, and also I guess any cost saving in terms of the G&A and your other operating line when you compare – when you look at 2009 versus 2008?

Our strategy for this year is despite the fact that a lot of people think that it is a very tough year, we continue to see our business continue to grow well, and we do expect to use this as an opportunity to capture more market share. So we will continue to re-invest back into the business but we do expect operating margin to stay very much at the same level as 2008. Dick Wei – J.P. Morgan: Okay, great. Thanks a lot.

The next question comes from Eddie Leung from Merrill Lynch. Please state your question. Eddie Leung – Merrill Lynch: Good evening everyone. I have a couple of questions, the first one is regarding the advertising business as well, if you guys do not have the full year visibility at this moment, perhaps could you talk about the requirements from advertisers this year versus previous years, do we see their focus changing from certain aspects? That's my first question.

What kind of aspects do you mean? Eddie Leung – Merrill Lynch: Perhaps for example, do they become more cost conscious, do they have a requirement of more flexibility in terms of putting in the orders like shorter notice periods, perhaps on the format of different advertisements, various displays – versus displays versus search, et cetera?

Yes, I think the advertiser always gives this kind of requirements to our team. So it is as I mentioned earlier some industry – some companies in some industry category like automobile, real estate, PC, housing comparators and even online games, we will focus – because we have limited budgets, so we will focus more on the cost efficiency and the user effectiveness. So based on that, our team e will work more diligently on the events marketing and effective marketing, even wealth [ph] marketing. Eddie Leung – Merrill Lynch: Got that. And how about… yes, go ahead.

There are different – more forms of media platforms, not only just the text based 1.0 media, but also the blogs, the message boards, and the video and also the opinion – information process online. So basically provide more forms that when a more cost effective conscious advertisers to spend money, they just try to experiment with all these new forms, try to increase their effectiveness. And also, this will also, especially for Sohu, because Sohu is such as diversified company in terms of products, so we have many innovations in different – in many areas and that's why it's always lot of new experiments with these forms.

Yeah, in at least in Charles comment in the year 2009 I think a lot of companies will focus – will be more sales driven, so will focus more – will make more efforts on the offline and online interactive marketing campaigns help them to drive more sales. Eddie Leung – Merrill Lynch: That is very, very helpful. And my last question is on the perhaps could you guys give us the full year capital expenditure for 2008 and if there is any plans for 2009?

I don't have it off-hand. I will send it by mail. But we do have – I think the CapEx for this year and last year will be very similar. Eddie Leung – Merrill Lynch: Got it. Thank you.

The next question comes from Paul Keung from Oppenheimer. Please state your question. Paul Keung – Oppenheimer: Yes, hi. Good evening. Couple of questions, the first one has to do with the rate card discount, I was wondering if we look at the rate card discounts that you were looking at in the fourth quarter and average in 2008, how the trend has changed in 2009 again, and particularly what is embedded in your first quarter outlook? And second on the Tian Long Ba Bu, I was confused by the commentary because you're suggesting that the lower paying accounts are paying more, the APA numbers are flat, but then your PCU numbers and the user numbers are growing, and historically more often than not, games that showed those trends tend to pretty strong sequential revenue growth. You are guiding to somewhat flattish outlook, so I was curious what – is it just a function of being conservative, or is there something else I am missing in those operating trends with TLBB?

Regarding the rate card, I think we will remain the present price by this quarter's end, and we plan to adjust the pricing early April. That means we will increase the price of some card advertising resources in a limited level, and will decrease the price of advertising resources which are not so fully occupied.

And going to the question of games revenue guidance, I mean as we keep explaining, Chinese New Year is the lowest season for game players. They all go back home and join other forms of entertainment with their family and so on, so we're conservative, but it is also reasonable for us to guide flat. Thank you Paul. Paul Keung – Oppenheimer: And if you don't mind, one last question. The last question is more a strategic one for you guys, you might have been asked so many times, but I have been talking to some of the advertisers, some of your customers following the Sina-Focus merger announcements, and one of the things that Sina has talked about openly is they have about 300 customers to Focus much larger customer base and one thing they want is the synergy there just to take on, possibly take on some market share by adding a much broader customer base from the Focus Networks, so I was curious how do you think about that competitively from where you sit in terms of looking at it from a business standpoint? Do you think that it could have an impact on market share long-term if they could do that appropriately and then how would you respond to something like that in the long term?

So far we don't see any impact on our business and we are confident in our advertising revenue growth based on Sohu’s more and more powerful media platform.

Yes, I think we need – we are focused on building really the best, most desirable Internet properties that whatever – any advertisers, they cannot miss, and it will give a much powerful platform.

And if I may just add, where we have an acquisition either of companies or of assets, we have heard about the world synergy, and we saw how that works within Focus Media. So after the acquisition or purchase by Sina, we have yet to see how that works, synergy works within Sina. Thank you. Paul Keung – Oppenheimer: Thank you.

The next question comes from Kathy Chen from Goldman Sachs. Please state your question. Kathy Chen – Goldman Sachs: Hi. Thanks the call. I had three questions. First can you talk about more about the wireless guys, potential you are seeing in terms of the guidance, the revenue for the down quarter on quarter, what exactly are you seeing in terms of the regulatory and business environment? The second question is on the game side, can you share any initial metrics from the technical testing for DMD and Immortal Faith? And the last question is on your cash balance, given the net cash of over 300 million, what is management's outlook in terms of potential cash usage? Are there any potential acquisitions that you're looking at?

I will take the first two. Regarding the wireless revenues, we actually said on the call last quarter that we were actually seeing more stable regulatory environment, and part of the reason why our wireless revenues have been growing is because of certain preload features into handsets. Unfortunately towards the end of 2008 and start of 2009, the operators and the authorities were kicking another round of new regulations requiring preload handset features to also need second confirmation. So that leads to an expected decrease in our revenues by about 1.5 million to $1.8 million. Second?

Acquisition, right? Cash level and…

Sorry, Kathy. What’s your second question? Kathy Chen – Goldman Sachs: Sorry, just any initial metrics you can share in the technical testing of Duke of Mountain Deer and Immortal Faith?

Duke of Mount Deer, my apologies. My games team insisted that everything on Duke of Mountain Deer has to remain very confidential for competitive reasons. So I'll turn it over to Charles to talk about acquisitions.

Well, I think the investments – the best investment is in Sohu itself because we have confidence over the management and our technology innovations. So first of all, we have this 150 million share buyback program, and also we have many new products like video online, the – so these card families and also – so we believe that – we do not believe the Internet acquisitions, especially for community website, the consolidation, the integration has great challenges. So we have great cash balance, but we will more use them to invest in our self, either by share buyback or technological innovation and the balance in CapEx. Kathy Chen – Goldman Sachs: Okay, thank you.

The next question comes from Ming Zhao from Susquehanna. Please state your question. Ming Zhao – Susquehanna: Okay. Thank you for taking my questions. A couple of small questions, so first of all, Belinda, can you tell us what is the percentage of FMCG in your advertising revenue and also how does that compare to the third quarter?

Ming, you are asking about fourth quarter, right? Ming Zhao – Susquehanna: Yes, Q4, yes.

In the fourth quarter, the FMCGs segment accounted for less than 10% of the total revenue. Ming Zhao – Susquehanna: And is that an improvement from the third quarter?

I think almost keep flat compared with the performance in the third quarter 2008.

So, no decrease, right, from…

Yes. Ming Zhao – Susquehanna: You mean percentage flat or the absolute dollar amount flat?

Percentage. Ming Zhao – Susquehanna: Okay, all right. The second question, is how is financial service industry doing in the revenue line?

Actually in the fourth quarter, the financial statement decreased. But as always, it’s not been a big factor for us. Ming Zhao – Susquehanna: Okay, all right. Understand. And Carol, what is the other revenue in your revenue lines, what business are those?

We have certain projects undertaken by, for example, Go2Map. Ming Zhao – Susquehanna: Go2Map, okay. But that business line has been pretty volatile?

Yes, because those are on project basis. (inaudible) but that has always been pretty small when compared to our whole pipe. Ming Zhao – Susquehanna: All right, okay. My next question is, Charles, we have seen some new features on SoGou Pinyin, people can use SoGou Pinyin to search, can you give us some color on the user behavior after you have launched that feature, can we see any meaningful change this year in the search business?

Well, thank you for your attention to that detail. It is important, but we only recently launched the SoGou Pinyin 4.0, and so the users probably definite but mostly people using SoGou Pinyin to input Chinese characters rather than doing search. So it is really a brand exposure that try to tell people that SoGou is not only about SoGou Pinyin method or desktop software but also about search. So that is important and we also have other some marketing programs for Sohu search, so it’s – so we should expect that SoGou search engine because of the vast desktop user base of the SoGou Pinyin and also we launched our new SoGou browser, also basically desktop publication, with the help of this software and also with SoGou, its own technology, superior technology, but we probably missed on the product side, but now we are improving on the product side. So I think we should expect some healthy good growth of search traffic during 2009, and that will mean translate into SoGou advertising, search advertising revenue in 2010, but basically traffic first and then revenue follows. But we never give up SoGou and we have high hope for SoGou search. And I think I hope that entering into 2010 and especially 2011, the search revenue will become probably after game advertising, brand advertising and wireless, and then the fourth pillar – fourth major income, I mean revenue engine for Sohu. Ming Zhao – Susquehanna: Okay, thank you very much.

I will now hand the conference over back to management. That's the last question we have time for. Please continue.

Thank you everyone for joining us today. Please let us know if you have further questions.

This concludes today's conference call. Thank you for participating.