Eric Yuan - Investor Relations Dr. Charles Zhang - Chairman and Chief Executive Officer Carol Yu - Co-President and Chief Financial Officer Dewen Chen - President, Changyou Erin Sheng - Interim Chief Financial Officer, Changyou Xiaochuan Wang - Chief Executive Officer, Sogou Ye Deng - Vice President of Sohu and COO of Sohu Video

Dick Wei - Credit Suisse Alicia Yap - Barclays Debbie Wang - Bank of America Thomas Chong - BOCI Chi Tsang - HSBC Alex Young - JP Morgan Wendy Huang - Standard Chartered

Ladies and gentlemen, thank you all for standing by and welcome to Sohu Quarter One 2014 Earnings Results Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) Please be advised that this teleconference call is being recorded today, Monday the 28th of April, 2014. I would now like to hand the call over to your speaker for today Mr. Eric Yuan. Please go ahead, sir.

Thank you, operator. Thank you all for joining us today and discuss Sohu’s first quarter 2014 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang; Co-President and Chief Financial Officer, Carol Yu. Also with us from Changyou are, President, Dewen Chen; Interim Chief Financial Officer, Erin Sheng; as well as CEO of Sogou, Xiaochuan Wang; Vice President of Sohu and COO of Sohu Video, Ye Deng. Before management begins their prepared remarks, I would like to remind you of the company’s 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 statement. For more information about the potential risks and uncertainties, please refer to the company’s filings with the Securities and Exchange Commission, including its registration statement and most recent Annual Report on Form 10-K. With that I will now turn the call over to Dr. Charles Zhang. Charles, please proceed. Dr. Charles Zhang: Thank you and thanks to everyone in our call. We accelerated migration to mobile internet. I’m pleased to report that Sohu’s portfolio of mobile properties is gaining good traction. On the media front, Sohu WAP Portal, Sohu News Application -- Sohu News App, as well as Sohu Video App are all growing rapidly. Notably in the first quarter, mobile video traffic has surpassed PC traffic. For Sogou, not only has our mobile Pinyin continued to pride itself as the third most popular App in China, it is number two player in mobile search area with traffic growing north of 20% sequentially. Before I give more details on performances of our key businesses, let me share with you our financial results for the first quarter of 2014. Our financial performance in the first quarter was steady as revenue grew in line with our expectations. Total revenues were $365 million, up 19% year-over-year and down 5% quarter-over-quarter. Net brand advertising revenues were $111 million, up 38% year-over-year and down 10% quarter-over-quarter. In particular online video advertising revenues rose 78% from a year ago. With Tencent’s cooperation Sogou revenue topped expectations at $70 million, up 78% year-over-year and flat quarter-over-quarter. Changyou’s MMORPG and web games performance was stable with online game revenue of $163 million, down 2% year-over-year and 5% quarter-over-quarter. With investment in new initiatives, we see a positive initial response. In the first quarter, total average monthly active accounts of our platform and software applications reached $239 million, which was 60% increase from the previous quarter. Non-GAAP net loss attributable to Sohu.com was $48 million, or $1.26 loss per fully-diluted share. Now, I will go through some of our key businesses, first about our media business. Sohu news and video franchises are built on Sohu’s 16 years of media experience and (inaudible) and presented strong brand equity. We believe the online media market in China remains huge and our media platform competes well in this market and will remain as one of our key investment areas. For online news, users shifted quickly from PC to mobile. We saw fast increasing users, now using Sohu WAP portal and News App to consume content. We are building a big data center to aggregate data collected from various mobile properties within the entire group to discover the most popular content on our platform. With such data mining efforts, we are able to recommend personalized content such as -- such technological advancements would not only help save our content and the total cost, but also make targeted adds possible, strengthening our future monetization capability on mobile. For video, we believe the business nature fits well with Sohu’s media DNA as we consistently offer our users compelling content. In the first quarter, we maintained the leading position in major content categories. For example we broadcast 33 new domestic TV dramas, the highest coverage in the industry. For American content, we were able to bring back the new season of House of Cars on exclusive basis. This series generated a great amount of discussion on social networking sites and achieved outstanding viewership performance. Original content has always been a category we are proud of. It provides users rich selections from web search, hot shows to reality shows and others. One of the most popular program Sohu Video Entertainment Report, a daily show that covers hottest entertainment event gained strong user traction after breaking some exclusive news. According to iResearch that is the second most watched variety show in the first quarter. As we said last quarter that in 2014, the competition for hot content intensified in particular for some popular variety shows. We stayed away from those which were sold at irrational high price. However, when we look at our content pipeline for the second quarter and the rest of the year, we are confident that our selection of license content and original programs will continue to draw more users. We have secured a vast majority of the highly anticipated domestic TV dramas for the year, including the plays, The Last Order, (inaudible) Step by Step Surprise, Bu Bu Jing Xin and Perfect Couple Jin Yu Liang Yuan. We also expanded our coverage on Hop animated series that appeal to youngsters. We have the exclusive rights for popular series such as One Piece, Fairy tale (inaudible) and Hunter and Hunter, Chen Julian. Lastly, we also have a few exciting original productions in our pipeline including Secretly Greatly in (inaudible), a practical joke celebrity reality show that is shot with hidden cameras. We're the first company in China to produce such a brand new category of content. And the show generated immediate buzz among young people upon launch. Such high quality content helped to draw more viewers for our both PC and mobile video platforms with mobile traffic showing stronger momentum and exceeding PC during the first quarter. The specific matters such as broadcasting some of our best content exclusive and original content first on mobile platforms only have helped achieve this result. We also added more short video clips on our WAP Portal and News App to get more exposure. In March, the daily unique visitors and the video view of mobile video rose 47% for video view -- for unique visitors and 66% for video view sequentially. Regarding our video sales strategy for 2014, no doubt we will put a lot of attention to monetize mobile traffic in the larger scale. Mobile video is generating incremental inventories, which can help ease the tight inventory situation in top tier cities like Beijing and Shanghai. We’re also seeing other customers showing strong interest in spending their budgets on mobile video. Let’s next move to Sogou. Search is always an important piece in Sogou family, as it can generate great synergies with our other businesses. I am pleased to report that Sogou already developed a strong business plan 2014 and is working closely with Tencent on how to pursuit deep integration with our products. Xiaochuan Wang will update you in more details in his remarks next. Lastly for Changyou; in the first quarter, the core businesses, online games and online advertising continued to deliver top-line results in line with our expectations but more importantly its platform initiative [including] 17173 property as well as growing its various software applications. As a result of the significant resources devoted and proactive marketing efforts, we saw good user traffic growth on 17173 website and other software. Total average monthly active accounts for platform channel and software reached $239 million, an increase of 60% quarter-over-quarter and 182% year-over-year. In order to reach our goal of building a unified gaming platform that serves the various needs of gamers for the rest of year, we will continue to invest aggressively in the platform business to develop and promote our products. And as a parent company, Sohu fully supports Changyou’s initiative and investments in these areas. And I’ll pass the call over to Xiaochuan for an overview of our Sogou business. Xiaochuan?

[Foreign Language] Thanks Charles. Hello everyone. [Foreign Language] As an important participant in China’s Internet industry in particular in online search center Sogou [solidified] its position on PC while demonstrating even bigger competitive advantages and fast growth on mobile. On PC, with massive user base of 468 million, Sogou is one of the top search internet companies in China. On mobile, Sogou is already number two player in China, in terms of the user base as mobile Pinyin’s monthly active users exceeding 200 million. The online search sector, Sogou is one of the top three PC search players, number three in PC search and number two in mobile search. And we have consistently improved our competitiveness in mobile search. [Foreign Language] Upon the completion of the integration between Sogou and Soso and bringing together their tenants and technologies, in the first quarter, we (inaudible) matters to improve our search quality. For example, [invest] webpage search, we extended into more vertical areas and also achieved faster loading speed for mobile search. In addition, we absorbed social (inaudible) and social (inaudible) to user generated content products into Sogou’s sourced system rolling out new Sogou [browser]. For the first time, Sogou has our own UGC nature search products with improving search quality. Compared to the prior quarter, PC search traffic increased moderately outperforming the industry average rate while mobile search traffic grew 24% quarter-over-quarter. [Foreign Language] On the monetization front in the first quarter, the major operating metrics including the number of advertisers, click’s rate, cost per click and RPM all grew nicely year-on-year. We recently launched a new advertising display format (inaudible) which offers advertisers better traffic through displaying richer information. We also see an increasing number of customers who chose to spend on mobile search. [Foreign Language] In terms of financial performance, Sogou’s first quarter revenues reached to $175 million, representing a decent 78% growth year-on-year, which topped our prior guidance. Mobile search revenues accounted 12% of total search revenues. For the second quarter, we expect revenues to grow over 20% sequentially, I’m happy to report that Sogou is on track to deliver its financial goals set at the year beginning that is to in the second quarter of 2014 achieve $100 operating revenues and profitability. And we expect to turn profitable in 2014. And I would now like to turn the call over to Carol who will walk you through financials.

Thank you, Xiaochuan. Hello everyone. I will go through key financial metrics for each of our major businesses lines, first for brand ad business, revenues. For the first quarter, total brand ad revenues were $111 million, up 38% year-over-year and down 10% quarter-over-quarter. By different platforms, for the first quarter, ad revenues for Sohu.com including online video were $76 million, up 34% year-over-year with online video ad revenues up 78% year-over-year. Ad revenues for Focus.cn, our real estate channel was $26 million, up 52% year-over-year, of this around one-third was from e-commerce business. Second, by sector across all platforms, the top three sectors were automobile, real estate and FMCG, each contributed around 20% to 25% of total brand ad revenues. As Charles mentioned earlier for online video business as auto customers are quite interested in our mobile video ad service. We expect accelerated growth for this sector. At the same time, we have already identified some domestic brands as key potential accounts who are very keen to spend on video marketing. Three ad price, for the first quarter the overall ad rate is largely stable as comparing to previous quarter for both video and non-video ads. As and more specifically about mobile monetization, as Sohu.com from the second half of 2013, we kicked off mobile monetization starting with our online video business while starting in the first quarter of 2014, we conducted pilot testing doing mobile ad from Sohu News App. For the first quarter, mobile video ad revenues reached mid-teens of total video revenues, while ad revenues from Sohu News App, contributed in the single-digit up total revenues from News. Entering into April, we are seeing strong revenue growth for mobile video, with month-over-month increase at 40%. We will also be expanding our monetization efforts on Sohu News App. The cost of revenues for brand ad business, for the first quarter non-GAAP cost of revenues for brand ad business was $64 million up 44% year-over-year and 5% quarter-over-quarter. The year-over-year increase in other revenues was mainly due to increases in content and bandwidth cost. For the first quarter content cost was $26 million, up 41% year-over-year and 14% quarter-over-quarter. Majority of the content cost is related with our online video business, based on our regular review of traffic data for video contents, we notice a change in viewership patterns for license domestic TV drama series. Commencing trend refers 2014, we adjusted our accounting estimates for amortization of content cost for new domestic TV drama series to reflect such change, which resulted in a further acceleration of the amortization of content cost. For the first quarter, such change led to above $4 million higher content cost, based on our preliminary estimate the newly adjusted amortization policy would increase content cost by $8 million for the second quarter and $19 million for the full year of 2014 respectively, as compared to the prior amortization method. For the first quarter, bandwidth cost was about $19 million, up 66% year-over-year and 23% quarter-over-quarter. Due to traffic for mobile video is expected to grow quickly, we expect bandwidth cost will grow along with traffic for the rest of the year. Operating expense for our brand ad business. For the first quarter, non-GAAP operating expenses was $91 million, up 54% year-over-year and 7% quarter-over-quarter. The year-over-year increase was primarily due to increase in salaries and compensation expense and higher marketing and promotional expenses. Now let me talk a bit about our Sogou business line, total revenues were $70 million, up 78% year-over-year and flat quarter-to-quarter. Of this, search-related revenues were 64 million, up 78% year-over-year and flat quarter-to-quarter. Non-GAAP operating income was about $0.5 million as compared to operating loss of $3 million in the previous quarter and 4 million in the first quarter of 2013. For Changyou, for the first quarter, total revenues including one-time 17173 was $181 million, up 2% year-over-year and down 7% quarter-over-quarter. The non-GAAP cost of revenues and operating expenses were $210 million, up 176% year-over-year and 20% quarter-over-quarter. Both year-over-year and quarter-over-quarter increases were mainly due to increases in salaries and benefits expenses and higher advertising costs for the promotion of software application PCs and mobile devices for our platform businesses and software applications. The non-GAAP operating loss was $30 million, this compares with non-GAAP operating profit of $30 million in the last quarter and $102 million in the same period last year. Now turning to our overall operating cash flow. For the first quarter, operating cash outflow was $35 million of that, operating cash outflow for Changyou is $16 million while operating cash flow for other business units were $19 million. Now let me provide our outlook for the second quarter of 2014. We are expecting total revenues to be between $397 million to $411 million. Brand advertising business to be -- brand advertising revenues to be between $130 million and $135 million this implies sequential increase of 17% to 22% and annual increase of 30% to 35%. Sogou revenues to be between $86 million and $90 million, this implies the sequential increase of 23% to 29%, and an annual growth of 72% to 80%. Online games revenues to be between $161 million and $166 million, this implies a sequential decrease of 1% to sequential increase of 2% and an annual decrease of 1% to 4%. Before deducting the share of non-GAAP net loss pertaining to non controlling interest, non-GAAP net loss to be between $47 million and $53 million. Non-GAAP net loss attributable to Sohu.com Inc. to be between $48 million and $52 million and non-GAAP loss for fully diluted share to be between $1.25 and $1.35. Assuming no new grant of share based awards, we estimate that compensation expenses relating to share-based award to be between $8 million to $9 million. The estimated impact of this expense is expected to increase Sohu’s loss for fully diluted share for the second quarter of 2014 and the U.S. GAAP by $0.21 to $0.23. This figure should not be used to calculate Sohu projected GAAP loss for fully diluted share, as there are other factors impacting such a calculation for which no reconciliation is provided. During the first quarter, we saw the momentum of our Group’s overall mobile monetization in particular for Sohu Video. For Sogou, we are expecting another year of strong top-line growth and the business is well on track to achieve profitability in the second half of this year. Changyou experienced (inaudible) results from its proactive investments in its new initiatives. With all these, I’m optimistic that Sohu will capture tremendous opportunities ahead in the mobile era. This concludes our prepared remarks. Thank you for joining the call today. Operator, we would now like to open the call to questions.

Thank you. (Operator Instructions). You have your first question coming in from the line of Dick Wei from Credit Suisse. Please go ahead. Dick Wei - Credit Suisse: Hi, thank you very much for taking my questions. I guess my first question is on the, I guess there is a lot of cooperation investment in internet industry. I think both on the YouTube front and anything which you are getting into mobile search. And I wonder, how would that kind of industry change your strategy going forward in your business lines? And what is the company thinking about for the potential strategic partnership plan to be investments from other players, just wonder what’s your overall thoughts are? And then I have got a second question is on the basically, some of the execution plans in terms of the mobile ads on your mobile apps itself? Thank you. Dr. Charles Zhang: Let me answer your question. I think our video business, we will continue our current strategy, which is organic growth because we have -- overall the group’s overall platform, media platform with news and media and also Sogou we have which are constantly generating new users for our video platform. So, we will continue our organic growth strategy with video, which has proved in the past six months quite effective. In terms of mobile search rate, I think with in cooperation with Tencent on the mobile front and also Tencent’s vast territory which when users need to search it’s actually powered or default to Sogou, so we already have a large traffic channel so that we can be competitive in this mobile search market no matter what happens with other investment or in the industry change.

So Dick, what is your second question? Dick Wei - Credit Suisse: Yes. I guess, because you have mentioned that on the advertising front you’re going to do more testing in terms of the mobile advertising on our News App; wondering if you have anything you can, more color you can add in terms of some of the potential advertising format or some of the plans you have on that front? Thank you. Dr. Charles Zhang: We are actually experimenting with different formats. We have actually a lot of example to study from. Basically there is -- with the small screen like mobile there is -- but there is some standard advertising format. There is also some new form of formats. The simpler form is banner, which actually although it’s a small screen, but it’s actually opening your eyes with the similar angle as PC screen. So it can be applied there and also there will be some other embedded, topical embedded advertising with the new flow. There is also some other targeted following because it’s easier to follow the users with the mobile phone. So it’s -- to know the user profile. So we are experimenting with different formats. Dick Wei - Credit Suisse: All right, great thanks Charles and Carol. Thank you.

We have your next question coming in from the line of Alicia Yap from Barclays. Please go ahead. Alicia Yap - Barclays: Hi, good evening everyone. Thanks for taking my questions. I actually have some follow-up questions on the mobile search. So, I think Charles and Xiaochuan you guys mentioned, the mobile search traffic grew about 24% sequentially. So I wanted to understand was that mainly attributed to the increasing traffic support by $0.10? And then if we -- if you can give us some update in terms of the mobile CPC trend versus the PC as of display and also update on the total number of advertiser for the quarter? Thank you.

[Foreign Language] I think the main reason is Alicia is in the first quarter a highly integration of the Sogou and Soso team, we consistently improved the [addition] of our search technology and because that has improved the user experience and drive up actually the previous, the search users, you’ve seen Tencent properties to doing search and the percentage of them now using Sogou is higher than previously.

[Foreign Language] So in terms of the CPC for PC search, the sequential growth is 9%. [Foreign Language] So, CPC for mobile search is flat quarter-over-quarter. And we'll see some improvement in coming quarters. [Foreign Language] During the first quarter, our total online marketing customers are 53,000 or 42% higher than a year ago. Alicia Yap - Barclays: Okay. Thank you for the answer. I actually have one quick follow-up instead; I think you mentioned on the mobile search market share we are actually number two. So, I wanted to get some clarity in terms of what is the definition of that and what are the sources based on to the query traffic shares or on the revenue market share that is number two on mobile? Dr. Charles Zhang: For query it’s obviously the Sogou with the number two delays. We think in terms of traffic (inaudible) the mobile search revenue Sogou is now the number two player in the mobile search area. Alicia Yap - Barclays: Okay. Thank you.

Your next question is coming from the line of Debbie Wang from Bank of America. Please go ahead. Debbie Wang - Bank of America: Hi, thank you for taking my question. My first question was how much of the brand ad is related to the video ads and how should we expect this trend going forward? And second question is would you might give us an update on the integration of Tencent’s search business and what are the synergies we have been seeing? Thank you.

Sorry. Can you repeat your first part of the question? Debbie Wang - Bank of America: Yes sure. So how much of the brand ad is related to the video ad?

Okay. It's about one-third. Debbie Wang - Bank of America: One-third. Okay. Thank you.

Yes. Thank you. Debbie Wang - Bank of America: And second question was on the integration with Tencent’s search business. What are the synergies we see?

[Foreign Language] So, in the first quarter on the major Tencent’s takeaways, such as QQ Portal, QQ Browser, as well as Tencent’s navigation website that is on Sogou already replaced Soso as default search. And as we mentioned earlier, we are consistent to optimize our search service, search quality. And in the first quarter we also added two more new [entering] points from the Tencent properties which are the PC and mobile portals that users can feed recommendation needs actually [WeChat] or they connect with Sogou’s search service. [Foreign Language] So, we actually see some leverage on the top of the combined the scale up of the traffic. So we’ll see some acceleration around new growth in [PC] in the same quarter.

And sorry, just to clarify it, the percentage of video ad revenue is about one third for the second quarter and for the first quarter it’s just below 30%. Debbie Wang - Bank of America: Okay. Got you. Thank you. And I guess sorry, also one last question, on the recent investment by Alibaba into Youku, how does Sohu see the impact? Thank you. Dr. Charles Zhang: Well, I guess the competitor will have more cash, so probably there will be more competition and cost of content, we will probably be able to drive the cost of content, drive up. Debbie Wang - Bank of America: Okay. Thank you.

We do have your next question coming in from the line of Thomas Chong from BOCI. Please go ahead. Thomas Chong - BOCI: Hi, good evening. Thanks for taking my questions. I have two questions. The first question is about your mobile video traffic. How much is it from tablets and -- between tablets and smartphones, and how much is it coming from Apple and Android? And my second question is about your real estate advertising growth. Can management provide some color about the sources of this online real estate revenue? Is it mostly coming from brand advertising or coming from e-commerce transactions? Thanks.

I’ll take question first. Like what we said in the script, it’s about [30%] coming from e-commerce transactions and with the rest are all brand advertising. So it’s based on the advertising revenues. Dr. Charles Zhang: Well, I think the mobile traffic, the iPad, I mean the tablet, the iPad traffic is probably in the teens percentage rate, but mostly are them platforms and also -- well the split between iOS platform and Android, it’s similar to the market share of the mobile phone the two kind of phone in China basically, it’s 60% from android system and the another 40% are from iPhone. Thomas Chong - BOCI: Thanks.

We do have your next question coming in from Chi Tsang from HSBC. Please go ahead. Chi Tsang - HSBC: Hi, good evening. Thanks for taking my questions. May I ask just two questions? Firstly I’m wondering, what your percentage of your traffic is being driven by U.S. TV dramas? And secondly also related to video, I’m wondering given the potential for increase in mobile monetization but also rising bandwidth cost as it relates to mobile, can you give us an update on what you think the, sort of the medium to long term margin profile is of your video business? Thank you very much. Dr. Charles Zhang: Well, I think it should be below 10% of the American TV dramas percentage. But it’s, here I only comment that, I think the Big Bang Theory and what happened recently, the four dramas that are being asked, so they’re being asked to tick down, it’s only a standalone events. It does not reflect I believe overall basically change of the government policy toward American TV shows. So we’ll continue to develop our American TV shows business, which actually the users for this type of programs are actually high-end and really with very good purchase power. So it’s ideal audience for advertisers.

And on the margins, we believe that the margin will actually as we have mobile monetization, we should be improving on the margin side for our online video business. Chi Tsang - HSBC: And do you think the long-term sort of margins, on gross margin side the video is sort of in the 40%, 50% range or higher than that?

I think it’s really hard to tell specially we did having a bigger competitor with really tons of cash ready to bid up content prices, so it’s very difficult to say you right now. Chi Tsang - HSBC: Okay, thank you.

We do have your next question coming from Alex Young from JP Morgan. Please go ahead. Alex Young - JP Morgan: Hey, good evening everyone. Thank you for taking my question. I have a quick question on the search business. If my math is correct looks like Sogou makes a high single-digit millions of profit in the quarter and the most of the profit coming from sequential reduction of cost of revenue during the quarter, wondering whether that’s due to the incremental price injection from Tencent so you guys decide to buy less of the traffic from external parties and what could be the future trends in coming quarters? Thank you.

[Foreign Language] Alex we see actually as you say as a percentage of revenue cash is coming down from the prior quarter about one-third, so its 3% to about 25%, 26% and we see this such trend will continue in 2014 as our revenue side continue ramp up and we will see some continuous money expansion. And as Xiaochuan mentioned earlier, we’re well on track to achieve $100 million a quarter revenues in the second half of this year and some profitable for the full year obviously. Alex Young - JP Morgan: So, just quick follow-up question, shall we expect the cost of goods sold to continue to trend in second quarter or it will gradually increase over the next few quarters? Thank you.

Well just to clarify are you talking about percentage of sales or are you talking about absolute dollar? I think if it is absolute dollar amount, the answer is pretty obvious, actually it will trend up. Alex Young - JP Morgan: Yes, just because in this quarter I think the cost revenue for Sogou actually trend down. So just wondering what could be the margin and absolute…

Well, it’s a one-time thing. Alex Young - JP Morgan: Okay, great. Thank you. That's very helpful, thank you.

We do have your next question coming in from Jiong Shao from Macquarie. Please go ahead.

Hey, good evening. Thank you very much for taking my question. This is George calling on behalf of Jiong. I have a follow-up question on the basically the American TV dramas. So can you guys share with us more insides into the overall like the literal change governing the whole thing, because we notice that something as harmless as Big Bang Theory is kind of, I understand you are saying that this is like individual cases, but overall what’s the guideline now, do you see more tightening? And also is it now, is actually fast now adopting (inaudible) meaning anything you need to get approval from them or is it still like a [Black Friday] from the past where anything is not banned you can go ahead with that? Thanks. Dr. Charles Zhang: I think as I said, it’s a standalone event and I cannot, of course I cannot comment on what happened about the Big Bang Theory. And also, but I believe that the policy for American TV show is not tightening up. I think it’s just -- I think it’s going to be -- it probably will be macro managed, not micro managed overall management rather than individual dramas. And I think so that’s why we will continue.

Okay. And then yes, just want to confirm that there will be no problem with out of cards and other things. And also I just wanted to extend this question a little bit, so the overall regulatory environment do you see any changes due to I don’t know the changes in the policy making and also like the overall clean met actions recently about all these anti-porn things. Do you think that that will actually change the regulatory environment overall? Thanks. Dr. Charles Zhang: Well, it’s -- I think it will continue because in China it’s already video watching, it’s already American TV shows already became such a very popular activity and the government are well aware of that. And then actually we’re managing (inaudible) develop that’s where, that’s the way of doing things. And we don’t see any major change to stop this trend. And also actually recently [The Deloitte Men] that get a lot of traffic for us recently being taken down, but only for review so it will be back, it will be back online soon.

Okay cool. Thanks. That’s very helpful.

Yes. So, we do have your next question coming in from Wendy Huang from Standard Chartered. Please go ahead. Wendy Huang - Standard Chartered: Thank you. My question is mainly about your advertising business. So, you mentioned earlier that auto, real estate and FMCG are three important categories for you. So, my first question is given the recent macro environment weakness in China that we are actually seeing there, for example auto sales slowdown and also property sales declined genetically year-to-date. How were those macro factors actually action state into your advertising revenue for the rest of year? Should we expect these two, for example these two advertising categories grows to moderate significantly on a year-over-year basis? And secondly how are you seeing the competition from those specialized vertical sites such as bid auto, auto home and auto space and (inaudible) raised state of pace. Are you seeing them taking share from portal ads and what are your unique value propositions in the portal? Thank you. Dr. Charles Zhang: So maybe about real estate Carol can answer about the question on the macroeconomic situation.

We are actually seeing some softening on the real estate side, but we do not -- it’s like pretty moderate. The overall trend is not as bad as for example back in 2009 or 2008. We're still seeing demands coming from homebuyers and the developers are still, they're pretty eager to sell flats. But because we now recognize the revenue on cash received basis so it would be a bit lack behind as compared to the accrual basis. So, on overall macro environment, I just want to add one more point is we are not feeling any acute impact. As you can see from the guidance we gave out for Q2, we’re still seeing on an overall basis a pretty decent growth both on a Q-to-Q basis and on a year-to-year basis. Dr. Charles Zhang: What about the competition of verticals?

I think that for the -- for focus obviously we compete in the same arena as Sogou and we’re pretty similar. But if you can -- if you’re talking about the autos, it will be very different, because advertisers coming to us are mostly for their brand exposure versus for sales leads as compared to the verticals. So, I think we compete not exactly header on forward the auto verticals. Dr. Charles Zhang: Right. I think for autos we -- it’s really, advertising is our strong -- is our strength. And we see the shift from advertising from TV now to video so that it’s auto industry, we see advertising video is actually growing a lot, so it’s not affected by the macroeconomic situation and it’s really that we just have the higher share of the advertising market from TV. Wendy Huang - Standard Chartered: Thank you.

At this time, we have no further questions. I would now like to hand the call over to you sir. Dr. Charles Zhang: Okay. Thank you for joining us. And have a good evening.

Ladies and gentlemen that does conclude our conference for today. Thank you all for your participation.