Derek Mitchell - Ogilvy Financial Charles Zhang - Chairman of the Board, Chief Executive Officer Carol Yu - Co-President, Chief Financial Officer

Catherine Long (ph) - Citigroup Dick Wei - JP Morgan Eddie Leung - Banc of America-Merrill Lynch Jenny Wu - Morgan Stanley C. Ming Zhao - Susquehanna Financial Group Kathy Chen - Goldman Sachs Gene Munster - Piper Jaffray Jeffrey Lindsay - Sanford C. Bernstein Wendy Wong - RBS Wallace Cheung - Credit Suisse

Good evening, and thank you for standing by for the Sohu third quarter 2009 earnings conference call. At this time all participants are in a listen only mode. After management prepared remarks there will be a Q&A session. Today’s conference call is being recorded. If you have any objections you may disconnect at this time. I would now like to turn the meeting over to your host for today’s conference, Mr. Derek Mitchell, Sohu Investor Relations Representative from Ogilvy Financial, please proceed.

Thank you and thank you all for joining Sohu.com to discuss our third quarter 2009 results. On the call today are Chairman and Chief Executive Officer, Dr. Charles Zhang, Co-President and Chief Financial Officer, Carol Yu, Chief Executive Officer of ChangYou.com, Tao Wang, Chief Financial Officer of ChangYou.com, Alex Ho and Sohu’s Senior Finance Director, James Deng. Before management begins their prepared remarks, I would like to read you this 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 economy, the slower growth in the Chinese economy experienced during the later half of 2008, and the first nine months of 2009, which could continue through the remainder of 2009, the uncertain regulatory landscape in the People’s Republic of China, fluctuation in Sohu’s quarterly operating results, EPS dilution resulting from ChangYou’s initial public offering, Sohu’s historical and possible future losses, and its reliance on online advertising sales, online games and wireless services. Most wireless revenues are collected from a few mobile network operators for its revenues. Further information regarding these and other risks is included in Sohu’s annual report on Form 10-K for the year ended December 31, 2008 and other filings with the Securities and Exchange Commission. Now let me turn the call over to Dr. Charles Zhang, Chairman and CEO. Charles, please proceed.

Thank you, Derek. Hello everyone and welcome to the call. Today I’m pleased to report that the third quarter of 2009 was another solid quarter for the Sohu group. During the third quarter we achieved record total revenues of $136.6 million, US dollars, in line with our third quarter guidance and the translating into growth of 13% year-on-year. This result was a testament to the solid execution of our business strategies during a challenging macro economic environment. Brand (inaudible) revenue increased 11% quarter-on-quarter to $48.5 million in line with our guidance, and down slightly year-on-year. Our brand advertising business over the first nine months of 2009 have been quite strong and recorded a revenue growth of 5.6% year-on-year despite heavy advertising spending pertaining to the Beijing 2008 Olympic Games and unfavorable economic environment in 2009. Our online game business posted record high revenues of $68.7 million, also in line with our guidance and translating into growth of 3% quarter-on-quarter and 26% year-on-year. For comparison purpose before deducing the share of net income pertaining to the non-controlling interesting in ChangYou, non-GAAP net income was $51.6 million in line with our guidance, up 5% quarter-on-quarter and 21% year-on-year. After the deducing the share of net income pertaining to the non controlling interest in ChangYou non-GAAP net income was $37.4 million or $0.96 per fully diluted share in line with our guidance. Our achievements can be attributed to continued growth in Sohu’s two core businesses, our portal business and online game business. A strong growth momentum and innovative products have positioned us as a leading Internet company in China. Fortune magazine recently labeled Sohu the third fastest growing US listed company based on our financial performance over the past three years. During this period we achieved an annual growth rate of 78%, total revenue annual growth rate of 59% and a total returnable annual growth of 35%. We will continue to capitalize on this synergies offered between our portal and online game businesses as we execute our long-term strategies. Now, let me discuss our portal business in more detail. In the third quarter of 2009, we continued viewed upon our well established media platform to further extend our online portal business. Ongoing investments in content technologically sophisticated product and the effective (inaudible) attracting new users to Sohu. During the third quarter we made further investment in our video content. We expanded our authorized high definition video content by adding a variety of (inaudible) documentaries, and popular domestic and overseas movies and TV series. Our diverse and ever expanding video content has driven heavy aligned traffic gross, its 125% quarter-on-quarter increased in average number of daily viewers, video viewers. Our leading position in this area is well recognized by other (inaudible), with strong out of hand growth. On September 15th along with 109 other online video companies, copyright owners and advertising firms we cofounded the China Online Video Anti-Piracy Alliances. Both Chinese and overseas video copyright owners and advertising firms have united in an effort to prevent online video piracy and the placement of advertisement on websites that are involved in (inaudible), calling for stricter punishment against companies engaging in infringement activating in online video sector. We at Sohu believe that the alliance will not only raise awareness of copyrights issues but also create greater entry barriers in establishing online video websites, ultimately raising product quality and benefiting the online video industry and then China’s (inaudible) in the long run. Playing to the technology side, we remained pleased with the progress made with Sohu Pinyin. It now has about 90 million weekly active users and according to (inaudible) by our research, 61.4% of Chinese software users said that they would recommend the Sohu Pinyin to their friends. We are confident that our confident technology and the quality product updates will increase the loyalty of the existing users and attract even more to the Sohu platform. In respect to branding, we continue to invest in our marketing campaign Browse Sohu, Know the World throughout the third quarter. The marketing campaign has had a remarkable success highlighting the Internet users’ Sohu leadership position when in the mainstream media. Average unique visitors to Sohu’s news channel rose 30% year-on-year in the third quarter of 2009. A strong growth given the difficult comparison due to the Beijing 2008 Olympic Games in the third quarter of last year. Our focus on content technology branding and branding allow our online portal to evolve and improve to match user interest while generating healthy traffic growth. Now I’d like to discuss the brand advertising revenue in more detail, on behalf of Belinda Wang, our Co-President and Chief Marketing Officer who is traveling today. But third quarter we reported brand advertising revenue of $48.5 million making for total brand advertising revenue of $131.2 million in the first nine months of the year with a growth rate of 5.6 year-on-year. In light of the current economic environment and the high (inaudible) revenue during the Beijing Olympic 2008, we are pleased with these results. The industries that contributed most to brand advertising revenues in the third quarter were auto, online games and real estate. In total the economy for more than 50% of total brand advertising revenue. Our fastest growing sectors in the third quarter were medical and healthcare, education and auto. Now turning to our top three industries for the third and fourth quarters 2009. Chinese’s auto industry, now the largest in the world is growing at a rapid pace. As a result of increased competition, auto manufactures are spending more money to promote their products as the follow the trend is shifting from offline to online advertising. Sohu directly benefits, and as a response we plan to launch more marketing activities focused on this industry in the fourth quarter of 2009. For online games, we have seen positive year-on-year growth from online game industry during the third quarter of 2009. Mainly because of relatively low base from very few new game launches during the 2008 Olympic Games. However, for the fourth quarter of 2009 we anticipate a weaker and ad revenues from this industry as a result of a few or new game launches and continuous cost cutting from small games developers. For real estate, as the real estate market rebounded strongly in the past two quarters, developers can easily fill their properties and have tended to reduce their marketing spends. We expect such a weakness to continue into the fourth quarter. We’ve had positive growth in (inaudible) revenue over the past quarters. Nevertheless, we still expect our 2009 year-on-year comparison versus 2008 to remain difficult given the exceptionally strong advertising revenues received during the Olympics. Our current outlook for the fourth quarter of 2008 assume a year-on-year growth to be between 0% and 4%, which implies full year 2009 brand advertising growth of between 4%-5% year-on-year. Now, I would like to discuss our online game business. During the quarter despite increased competition for new users our existing games continued to see healthy growth, with an expanding user base. This again reflects the success of our user driven approach to gain development and the game operations. We now operated three games, Tian Long Ba Bu, or TLBB played online and the newly launched Blade Hero 2, and have achieved the following. First (inaudible) registered users increased 9% to 75.1 million from 69.1 million last quarter. Second, aggregate active paying accounts or APA was up 1% to 2.4 million from 2.39 million last quarter. Third, aggregate peak concurrent user or PCU was approximately 910,000. And fourth, we cap average revenue per actual paying account or APA at an affordable level of 190 R&B up 2% from 186 R&B last quarter. Popularity of Tian Long Ba Bu, our flagship game, has increased after we launched the major expansion pack formal addition in late September. This expansion pack, which provides new quests and the challenges to game players through upgraded systems, functions and over 180 new features has generated positive responses from our gamers and extended the games life cycle. Examples of these new features include a platform for players to customize their virtual lifestyles and the in-game activities that came be played together by players of all levels. The rollout of an expansion pack has increased the PCU of Tian Long Ba Bu to 850,000 in October from 109,000, 719,000 in the third quarter. We will continue to field out these successes by releasing more expansion packs, with the next expansion pack scheduled to be launched near the end of this year. On September 9th we launched our third RPG game, the new 2.5 V of martial arts style fighting game, Blade Hero 2, the sequel to Blade Online. This game comes with the addition of new maps, new characters and more user-friendly controls, such as an auto navigation system and an improved mission tracking system. And it has successfully broadened the user base of Blade Online series. Besides cultivating our existing games, I’m happy to report that the development schedules of our part line games remain on track. First, for Duke of Mountain Deer, DMB, our second in-house developed game we expanded the scale of testing this quarter and doubled the number of tests accounts released to gamers. Feedback continues to be positive as we introduced additional community features, such as new team based activities and modified game functions based on feedback received. Second, Immortal Faith, our to-be licensed game continued to undergo closed beta testing. Finally, Legend of Ancient World a 2.5 dimension unlicensed game, went into another round of technical closed beta testing in September. I’m also excited to report recent business developments that will further diversity our game portfolio, attract new users and elevate ChangYou’s leading position in the Chinese online game market. First, we’ll be entering the 3D game market by expanding – by beginning in-house development of 3D games using advanced game engines from Big World and Cyrpack. With our strong team of experienced game engineers we’ll be able to fully leverage these industry leading game engines to deliver high quality 3D games with intuitive user interface, dynamic effects for realistic pictures and innovated game play. And second, we signed a licensed game Huang Yi (inaudible) to expand our game offering into 3D game segment next year. Huang Yi (Inaudible) is a 3D martial arts RPG developed RPG game developed by Chinese Gamer International Corporation, a leading game developer in Taiwan. The game shows potential for success in the Chinese market and it currently ranks as one of the top three games in Taiwan. It is also the best performing game in Taiwan this year to date, reaching a peak (inaudible) user of over 150,000 within one month of open beta testing, a record high in Taiwan online game market over the past two years. The game is based on a popular story from widely read Hong Kong comic book about the challenges of life for a Chinese expatriate outside his homeland. We received exclusive rights to operate the game in China. We expect to launch the game in the first half of 2010. In closing, we are excited by our continued strong progress in the third quarter. Our successful strategy of focusing on the in-game experience of our users continues to deliver healthy growth in our existing games. With the acquisition of an advanced game development technologies and the licensing of a new high quality game we have further strengthened our R&B capabilities and the pipeline. By the end of 2010, we’ll have launched the three licensed games and our second in-house developed game BMD, to become a multi-game in company with a diversified portfolio of products covering various graphic styles and the game varieties. These initiatives will serve as additional catalysts for further growth and it will extend ChangYou’s presence in key market sub-segments including 3D games. We are confident that our well-defined strategies and the strong game development and operation platform will deliver long term success. I would like to turn the call over to our Co-President and CFO, Carol Yu, who will take you through the quarter’s financials. Carol?

Thank you. Hello, everybody. I will walk you through our financials for the third quarter. One, revenues; starting with top-line results, total revenues were $136.6 million, representing an increase of 7% sequentially, an increase of 13% year on year. Grant advertising revenues totalled $48.5 million, representing a sequential increase of 11% and a year on year decrease of 2%. Online game revenues for the third quarter grew to $68.7 million as previously guided, an increase of 3% sequentially and 26% year on year. Revenues from the game operations increased 3% sequentially and 29% year on year to $66.9 million. This increase was mainly due to the increased popularity of our flagship game, TLBB. We would also like to note that we have removed from TLBB, all features related to the random drawings of virtual items in early July. Overseas licensing revenues were $1.8 million, an increase of 9% sequentially and a decline of 33% year on year. The sequential increase was mainly due to increased momentum of TLBB in countries such as (inaudible) and Malaysia. Recently we have also licensed TLBB to a game operator in Thailand. We will continue to license our games to selective countries to expand our global footprint. Wireless revenues were $16.8 million, a quarter-on-quarter increase of 12% and a year on year increase of 16%. The increase in wireless revenues was mainly achieved by the company's promoting its products through a greater number of channels. Most of the remaining figures I'll be discussing will be non-GAAP. Share based compensation expenses are charged to the quarter's cost of revenue and operating expenses. Total share based compensation expense for the third quarter was $4.5 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 this discussion to explain margins, cost, and expense items. Two, gross margins; overall non-GAAP gross margins for the third quarter was 76%, down slightly from the 78% last quarter, but up from the 74% during the same period last year. Brand advertising non-GAAP gross margin for the third quarter was 69%, increased from the 68% in the previous quarter, and a 62% same period last year. Online game non-GAAP gross margin for the third quarter was 93%, down from 94% in the previous quarter and third quarter of 2008. Wireless non-GAAP gross margin for the third quarter was 43%, a decrease from the 45% in the previous quarter and 51% in the same period last year. Three, operating expenses; for the third quarter of 2009, Sohu's non-GAAP operating expenses totalled $46.7 million, up 7% from the $43.5 million in the previous quarter and up 9% year on year. The quarter-on-quarter and year-on-year increase primarily reflects an increase in salaries and compensation expenses as a result of increased head count and increases in other costs and fees. Sales and marketing expenses related to Browse Sohu, Know the World marketing campaign recorded in the third quarter were $6.1 million compared with $2.8 million in the first quarter, $7.5 million in the second quarter. We plan to spend a further $2.9 million in the fourth quarter, making the total for 2009 relating to this campaign to be $19.3 million. Four, operating margins; non-GAA operating profit margin was 42% for the third quarter, down from 43% in the previous quarter and up from 38% in the third quarter of 2008. Income tax expenses for the third quarter of 2009 was $7 million compared with $8 million in the previous quarter. The effective tax rate for the third quarter was 12%. Net income; before adjusting the share of net income pertaining to the non-controlling interest in Changyou. Non-GAAP net income for the third quarter of 2009 was $51.6 million, in line with the company guidance, are 5% quarter on quarter and 21% year on year. After deducting the share of net income pertaining to the non-controlling interest in Changyou, non-GAAP net income for the third quarter of 2009 was $37.4 million or $0.96 per fully diluted share, also in line with company guidance. Seven, net margin; before deducting the share of net income pertaining to the non-controlling interest in Changyou, non-GAAP net margin for the third quarter was 38% compared with 39% in the pervious quarter and 35% in the third quarter of 2008. Eight, balance sheet and cash flow position; we continue to maintain a debt free balance sheet with strong cash flows. For the third quarter our businesses generated $65.1 million in operating cash flow. As of September 30th, 2009, our cash balance stood at close to $600 million. As of September 30th, 2009, our nets accounts receivable balance was $60.2 million, an increase of $6.9 million from the previous quarter. Brand advertising (inaudible) for the third quarter was 73 days, compared to 73 days in the pervious quarter and 54 days in the third quarter of 2008. As of September 30th, 2009 our bad debt provision totalled $1 million with bad debt expense of -$92,000 recorded for the third quarter of 2009. As of September 30th, 2009, receipts in advance and deferred revenue of our online gaming business was $29.2 million, compared to $22.6 million as of June 30th, 2009. Nine, business outlook; for the fourth quarter of 2009, Sohu expects total revenues to be between $134.5 million to $138.5 million with advertising revenues of $48-$50 million. Brand advertising revenues of $45-$47 million which imply a 7% to 3% quarter-on-quarter decline, or a 0%-4% year-on-year growth. This will bring our brand advertising growth for the full year of 2009 from 4% to 5% year on year. And online game revenues of $69-$71 million. Relating to our video strategy, we will record an additional $2 million for bandwidth costs and amortized purchasing costs of high definition video content. Before deducting the share of non-GAAP net income pertaining to the non-controlling interest in Changyou, we estimate our pro forma non-GAAP net income to be between $49.5 to $51.5 million as compared to $51.6 million for the third quarter as mentioned before. After deducting the share of non-GAAP net income pertaining to the non-controlling interests in Changyou, Sohu estimates non-GAAP net income for the fourth quarter of 2009 to be between $35-$37 million, and non-GAAP fully diluted earnings per share for the fourth quarter to be between $0.90-$0.95. Assuming no new grants of share based awards, Sohu estimates share based compensation expense for the first quarter to be between $3.5-$4.5 million, which includes that for Changyou of $3-$3.5 million. Considering Sohu's shares in Changyou, the estimated impact of this expenses is expected to reduce Sohu's fully diluted earnings per share for the fourth quarter of 2009 under US GAAP by $0.06-$0.08. In summary, our solid third quarter results illustrate the effectiveness of our management team in executing our business strategies. Our complimentary businesses have generated impressive research while delivering us through what appears to be the toughest stretch of the economic crisis. As more users seek out our unique online products available through our portal and online games and advertisers look to expand their budgets, we remain well positioned to continue delivering long-term value to our shareholders. Thank you for joining the call today. That concludes our prepared remarks and we'd now like to open the call up to questions. Operator?

(Operator's Instructions) Your first question comes from the line of Catherine Long (ph) with Citigroup. Catherine Long - Citigroup: Hi. Thank you for taking my question and good evening. My question is, as we approach the peak season of next year's advertising budget negotiations, how are you targeting your investments to what you would expect to be the fastest growing advertising categories for your business — something which I think is something that you have already alluded to in your prepared remarks with reference to the auto industry.

We'll surely be making pathways in the auto industry as we have always done and you can see it from this year's results, but I will maybe let Charles talk about our video strategy.

Well, I think the auto industry advertisers tend to do TV commercials, so they like those TV commercials. So it is perfect just to use those TV commercials to advertise on Sohu Video TV Channel. So in the fourth quarter we'll buy more content, we'll fight piracy harder, and we'll make sure that — and also you can see the bandwidth increase and we'll expect higher traffic and more auto and other kind of advertisers to advertise on our TV channel.

So we actually believe that if you're talking about the industry, we believe auto will still be very strong, but in terms of the mode of advertising, we believe video will be a strong growth point for us where we will be making significant investments. Catherine Long - Citigroup: And can I ask, in addition to auto, are there any other industries which you think you already have the early indications that they will be increasing their advertising spend materially next year and for which you are already preparing in terms of your content or maybe your branding strategy?

I think right now it's too early to say because it's only in October. If you remember, every year we only gave out our annual guidance in April or May. So right now we can't really see what are the early indications, but we would expect that for industries that continue to switch from offline to online such as autos and FMCGs will be our big growth drivers.

And the health industry. Catherine Long - Citigroup: Okay. Thank you very much.

Your next question comes from the line of Dick Wei with JP Morgan. Dick Wei - JP Morgan: Hi, thanks for taking my questions. I have a question regarding the cost side of things. I think we mentioned about this brand market thing — expenses is coming down in the fourth quarter, but I was looking at the guidance, the margin is not really picking up. I wonder, besides the additional $2 million of video-related cost, what are the additional costs that we expect to see and how is it going to trend maybe into next year or longer term? Thanks.

Other than the Browse Sohu, Know the World — like what I have said before, we will be making substantial investments in the video side. Others the margin trended down mostly because our revenue trended down. So I don't see any special items where there are any special costs or expense items that would lead to the fall in margin. Dick Wei - JP Morgan: And this around $2 million of video expenses that will be constantly ongoing, additional expenses not a one time expense, right?

Hopefully it will actually be trending up because with the increased viewership in the video, we will expect that that will continue to add more bandwidth cost. But on the other hand, like what we said earlier on, because we expect video advertisements to be picking up next year as well, we do expect that the margin, if we do a good execution, margins could stabilize. Dick Wei - JP Morgan: Great. Thanks a lot.

Your next question comes from the line of Eddie Leung with Banc of America-Merrill Lynch. Eddie Leung - Banc of America-Merrill Lynch: Good evening, everyone. I have a couple of questions regarding your advertising business. The first one is regarding competitions on the real estate assessment. Given some of the competitors seem to have a pretty aggressive expansion planned, can you comment on the competitive landscape you face in the real estate advertisers' segment, and what are your tactics to face the competition? Thanks.

Well, on the content side during the start of the quarter we integrated the real estate focus (inaudible) site well with the overall Sohu platform because the real estate industry, the housing, and property — all these things are closely related to the Chinese economy and are becoming a public topic on the mainstream discussion so it is really a very important part of the Sohu portal. So the integration of content is the focus with the Sohu portal and that's our strength. So instead of splitting the real estate portal to be a separate entity, to actually integrate. At the same time we have integrated sales efforts with our advertising sales force and the real estate, so the integration is basically on the content side and on the sales time side and I think the (inaudible) has already passed the bottom in (inaudible) and then really coming up. So we would expect the performance would be better, but then it would really depend on the macroeconomic situation. Eddie Leung - Banc of America-Merrill Lynch: I see. Thanks, Charles. The same question is on the number of brand advertisers. Could you share with us the change in brand advertisers during the quarter?

Hold on one second, I'm digging that up. We have now about 780 advertisers as compared to 680 in the quarter before. Eddie Leung - Banc of America-Merrill Lynch: Got that. Thank you, Carol. Thank you, guys.

Your next question comes from the line of Jenny Wu with Morgan Stanley. Jenny Wu - Morgan Stanley: Hi, everyone. Thank you for taking my question. First one is on the brand advertising, and basically what is the revenue contributions from your video products? And I have a followup.

It is still — it was zero a quarter ago and is still a couple of million dollars right now, but we're seeing a pretty nice trend from here. Jenny Wu - Morgan Stanley: Okay, sure. And (inaudible), your real asset initiative, so I remember last time you mentioned after the new team got on board, Sohu's (inaudible) advertising has returned back to normal levels in 2Q. So the question is, after so many efforts, what is the revenue contributions from this sector — how much —

What's the sector you're asking, Jenny? Say that again. Jenny Wu - Morgan Stanley: About the revenue contributions from your assets, and specifically did you see some growth in Q on Q and year on year?

We are actually, after the team reorganization, in terms of percentage, we are actually seeing a stabilization in the maintenance level of the real estate revenue. In terms of the year-on-year growth, actually we're seeing a down year or down three quarters for the first three quarters combined in the mid-teens level, but we actually expect a up quarter for Q4 on a year on year basis, but for the whole year we are seeing things trending down. Jenny Wu - Morgan Stanley: Okay, sure. And so now regarding your pricing, and I mentioned to you last time you were increasing the price in October, so how much you increase in practice now?

Key channels we increased by about 35% and then if you're talking about, on average, again, it is low teens. Jenny Wu - Morgan Stanley: Okay. Thank you very much. That's all my questions.

Your next question comes from the line of Ming Zhao with Susquehanna Financial Group. C. Ming Zhao - Susquehanna Financial Group: Hello. Thank you for taking my question. Good evening, everyone. I just want to ask you about 4Q advertising guidance. It's implying a down quarter sequentially. Usually, except last year, Q4 advertising revenue would be up quarter over quarter so I just want to get a color on why this year you are seeing something different?

I don't think there's any particular reason. One of the reasons why we're seeing a weaker — as Charles mentioned on this call, a weaker Q4 than people have expected or as some of as previously expected, is because of online games and real estate weaker than what we thought. And the reasons have already been outlined in Charles' script. C. Ming Zhao - Susquehanna Financial Group: Okay. Maybe another way to ask the trend here, could you tell us what is the monthly trend in the third quarter in July, August, and September months, which month is strongest and which one is weakest?

I think it's pretty evenly distributed. We don't see any particular trends because of what I said in the earlier calls, I mean, Q3 is the peak season for doing all these marketing programs so it's pretty evenly distributed.

And also the contract we signed quarter to quarter, or two quarters ago, is a big contract so the allocation is really very even. C. Ming Zhao - Susquehanna Financial Group: Okay, good. Thank you.

Your next question comes from the line of Kathy Chen with Goldman Sachs. Kathy Chen - Goldman Sachs: Hi, thanks for taking my question. Just a couple of questions on the cost side; it looks like G&A spend was higher during the quarter, could you just give us some color on whether we should expect these additional costs in the quarter to continue going forward. And then on the sales and marketing side, I got the color on the brand marketing side, but is there any indication yet on whether you will continue the brand marketing spend next year? Thanks.

Let me answer your second question first. I think as far as our strategy is, I think in terms of percentage of sales, we'd probably be looking at a stabilized percentage for next year, and then for G&A it would probably be trending down a bit in the fourth quarter by about $1 million. Kathy Chen - Goldman Sachs: Okay. And then sales and marketing as a percentage of sales has stabilized this year, was that meaning stabilized versus this year or past years?

Yeah, compared to this year. Kathy Chen - Goldman Sachs: So, but this year includes the brand campaign spend.

Yeah. So we'll continue with that. Kathy Chen - Goldman Sachs: Okay. Got it, thank you.

Your next question comes from the line of Gene Munster with Piper Jaffray. Gene Munster - Piper Jaffray: Hey, good evening. Could you talk about the news platform in terms of number of journalists that you've had and how that's been trending? And second, this is just to confirm, 2010 the branded add growth should be up over 2009 so the tough comp this year, but just want to make sure that everyone's on the same page with that? Thanks.

In terms of head count, we probably have about at house and editors in total combined, all of our channels and the like. And in terms of next year, I don’t' think anybody is looking at a down year for next year, especially as next year will be an event-rich year with World Cup, Expo, and the Asian Games to be held in Guangzhou. Gene Munster - Piper Jaffray: Okay. And the thousand journalists, what was that, let's say, six months ago?

Maybe 900. Gene Munster - Piper Jaffray: Okay, great. Thank you.

Your next question comes from the line of Jeffrey Lindsay with Sanford C. Bernstein. Jeffrey Lindsay - Sanford C. Bernstein: Hello, good evening. Can I ask two questions? First, how's TLBB or any of your future games been impacted by the Ministry of Culture requirements around things like game violence and content? Will we see any delays or any modifications or additional expense because of this?

Actually, in the TLBB we have already removed all the random drawing items since early July of this year. As we mentioned in the earlier call, that actually those revenues only account for less than 1% of our total online gaming revenue, so that's number one. Number two is we will continue to follow all the required regulations of the regulators and we don't expect delays of our games because of that. Jeffrey Lindsay - Sanford C. Bernstein: Okay. And could I ask also, for your mobile value added services, the margins were down. And are there any additional charges that you're incurring or is this just a difference in the structure of the business this quarter?

Well, because we've done more channel marketing, especially through TVs, so margin has compressed a bit. Other than that there is no other reason. Jeffrey Lindsay - Sanford C. Bernstein: Great. Thank you.

Your next question comes from the line of Wendy Wong with RBS. Wendy Wong - RBS: Hi. I just have one question regarding online advertising. I just wonder, your guidance which implies 3%-8% sequential decline, is it just because Sohu has more exposure to the online game advertising than your competitors or is it because we are actually seeing kind of double dip of the online advertising demand in China?

You are talking about the sequential decline, right? Wendy Wong - RBS: Yes. Because based on —

It could — what we have just mentioned, as we outlined in Charles' script, we are seeing weakness from the real estate vertical as well as the online gaming vertical so it is primarily coming from these two verticals. Wendy Wong - RBS: Okay. So based on your recent talk with advertisers, are you seeing a continuing upward change of the demand coming back and confidence gradually building up around the advertisers’ side, or are you seeing they are still cautious about their monthly dollar spending?

We are actually seeing pretty "normal" advertisers' behavior in Q3 other than these two verticals that we have just mentioned. Wendy Wong - RBS: Thank you.

Your last question comes from the line of Wallace Cheung with Credit Suisse. Wallace Cheung - Credit Suisse: Hi. A very quick question regarding (inaudible). I think the main reasons behind —

We can't hear you, Wallace. Wallace Cheung - Credit Suisse: Sorry about that. Okay, let me repeat the question again. It is regarding the sponsor search revenue. There are two strong quarters growth sequentially, any specific reasons behind any reasons related to the Sogo Pinyin? Thank you.

Yeah. I think the sponsor search still have a small number on the revenue side, but it's doing well now. It's a combined effort of a better Sohu brand because of the Sogo Pinyin and also increased traffic and also a better commercial system that monitors — provides a better mesh of the queries with the advertisers so it's really a combined effort. So it is a small number, but of strong growth, and we also expect the Q4 strong growth and the 2010, but it's something that probably is working a little bit now. Wallace Cheung - Credit Suisse: Is there any plan to have a new strategy on the wireless search side?

Well, yes. We are looking at that, but we believe that wireless search is no different from PC-based search, it is just an extension. So we need to make sure because the WAP search is really — WAP is really not an independent separate category. There are only a limited number of WAP sites so for wireless search it is really about web search so we need to first make sure that Sohu PC-based web search a success, or at least catch up, and have a slice of the pie. And then wireless search is definitely a natural extension. And also we're also looking at the Sogo Pinyin merchant and we hope that we'll be able to repeat the success of Sogo Pinyin on the PC platform and repeat that success with mobile phones. Wallace Cheung - Credit Suisse: Thank you very much.

We are now approaching the end of the conference call. I will now turn the call over to Sohu's Investor Relations Representative from Ogilvie Financial, Mr. Derek Mitchell of Ogilvy Financial for closing remarks. Please proceed.

Thank you, everyone, for joining today's call. If you have any followup questions, please do not hesitate to contact Sohu. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day, everyone.