Ladies and gentlemen, thank you for standing by. Good evening, and thank you for standing by for Sohu’s fourth quarter and full-year 2009 earnings conference call. At this time, all participants are in a listen-only mode. After the management’s 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 conference over to your host for today’s conference call, Mr. Derek Mitchell, Sohu’s Investor Relations Representative from Ogilvy Financial. Please go ahead, sir.

Thank you. Thank you for joining us today to discuss Sohu.com’s fourth quarter and 2009 year-end 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 Finance Director, James Deng. Before management begins their prepared remarks, I would like to read you the Safe Harbor statement in connection with today’s conference call. Except for the historical information contained herein, the matters discussed in this conference call are forward-looking statements. These statements are based on current plans, estimates, and projections and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Potential risks and uncertainties include, but are not limited to, the current global financial and credit market crisis and its potential impact on the Chinese economy, the slower growth the Chinese economy experienced during the latter half of 2008 and in 2009, which may continue through 2010; the uncertain regulatory landscape in the People’s Republic of China, fluctuations 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, noting that most wireless revenues are collected from a few mobile network operations for the company’s 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, welcome to the call. Today, I am pleased to report another quarter of strong results, with record revenues for the full-year 2009. During the fourth quarter, we achieved a total revenue of $135.8 million, in line with our guidance and translating into growth of 12% year-over-year. Brand advertising revenues for the fourth quarter were $45.9 million, in line with our guidance and up 2% year-over-year. Our online game business posted record high revenues of $70.7 million for the fourth quarter, also in line with our guidance and translating into growth of 3% quarter-over-quarter and 21% year-over-year. Before deducting the shares of net income pertaining to the non-controlling interest in Changyou, non-GAAP net income for the fourth quarter was $50.3 million, in line with our guidance. After deducting the share of net income pertaining to the non-controlling Interest in Changyou, on a fully diluted basis, non-GAAP net income was $35.8 million, or $0.92 per fully diluted share, in line with our guidance. For the full year of 2009, total revenues were $515.2 million, up 20% compared to 2008. Brand advertising revenues were $177.1 million, up 5% compared to 2008. Online game revenues were $267.6 million, up 33% compared to 2008. Non-GAAP net income before deducting the share of net income pertaining to the non-controlling interest in Changyou was $197.7 million, up 17% compared to 2008. After deducting the share of net income pertaining to the non-controlling interest in Changyou, on a fully diluted basis, non-GAAP net income for the full-year 2009 was $155.3 million, or $3.98 per fully diluted share. Our strong fourth quarter and full-year results are testaments to the successful execution of our business strategies across our core business segments, mainly portal and online game business. We believe our emphasis on securing and developing…

Thank you Charles, and hello everybody. I would like to walk you through our financials for the fourth quarter. One, revenue. Starting with topline results, total revenues of $135.8 million, representing a 1% decrease sequentially and a 12% increase year-on-year. Brand advertising revenues totaled $45.9 million, representing a sequential decrease of 5% and a year-over-year increase of 2%. Online games revenues for the fourth quarter of 2009 grew to $70.7 million, at the high end of our guidance, an increase of 3% sequentially and 21% year-over-year. Revenues from game operations increased 3% sequentially and 22% year-over-year to $68.6 million. Increases were mainly due to increased popularity of our flagship game, TLBB. Overseas licensing revenues were $2.1 million, an increase of 15% sequentially and 5% year-over-year. Wireless revenues were $15.7 million, a sequential decrease of 7% and a year-over-year increase of 6%. The quarter-over-quarter decrease was mainly attributable to China Mobile discontinuing the billing for WAP services in late November. For the first quarter of 2010, we expect wireless revenues to decrease around 20% to 30% quarter-over-quarter due to operators tightening controls over subscription and mobile phones coupled with the WAP policy. Our focus for the wireless business remains the capitalization on upcoming 3G opportunities. Most of the remaining figures I will be discussing will be non-GAAP. Impact of share-based awards, including share-based compensation expense and related non-cash income tax expense are charged to the quarter’s cost of revenue, operating expenses and income tax expense. For the fourth quarter, each of the total share-based compensation expense and non-cash income tax expense was $3.9 million. We believe excluding the impacts of share-based compensation awards from our non-GAAP financial measures of net income makes a more meaningful comparison of Sohu’s operational results and improves investors’ understanding of Sohu’s performance. Sohu will use non-GAAP…

(Operator instructions) First question comes from Catherine Leung from Citigroup. Please go ahead with your question. Catherine Leung – Citigroup: My question is how should we reconcile the company’s optimistic quality of comment for a rebound in the advertising market, which the first quarter guidance, is this I believe due to first quarter still being seasonally weak and not fully reflecting the market improvement, or are there also some nuances with the company’s major advertiser industry category? Thank you.

I think one of the reason is really the seasonal reason. It’s really a slow quarter, we have got spring festival in the middle of the quarter, and approaching the spring festival, you know, is the advertisers just become lazy and are working out hard, and after the spring festival, it’s already, the quarter already ends. So, this is one of the reasons. But looking at 2010, I think there is this general trend that online video become very popular and advertisers from – advertising industry, advertising motion picture and motion picture videos on television are the bulk part of and then some of them are moving into online. So, that will be one of the drivers and Sohu has already a leading position in this copyrighted content and this model. So, we are optimistic for 2010. Catherine Leung – Citigroup: Okay, thank you.

Next question is coming from Dick Wei from JP Morgan. Please go ahead with your question. Dick Wei – JP Morgan: And my question, a follow-up on the prior question, any particular industry segment that you see more negative decline QoverQ for Q1, and also as far as 2Q and 3Q is kind of maybe, yes, 2Q and rest of the years concerned, do you expect to see a pretty strong pickup in Q2 and Q3, particularly if you look at like the guidance for first quarter, it should be one of the – of Q1 that, that (inaudible), so I wonder any stronger-than-usual for the rest of the year? Thanks.

Dick, this is Carol. No, we didn’t see any particular weakness in any one of the sector. Traditionally, (inaudible) it is very slow during the first quarter and then in light of the recent various governmental regulations that come out each and every day. So, it’s slightly declined more than the rest of the other industries, but on a whole, it’s still pretty much a decline on overall basis if you are talking about quarter-over-quarter. And just like what Charles had said, we would remain pretty bullish for the entire 2010. It’s just that we believe that the growth would kick in, in the following three quarters instead of the first one. Dick Wei – JP Morgan: And any thoughts from your conversation with advertisers about this distributed growth would be like (inaudible) any color would be helpful? Thanks.

I am sure it would be a lot better than 2009. Dick Wei – JP Morgan: Okay, that’s great. Thanks a lot Carol and Charles.

And next question is coming from Eddie Leung from Banc of America/Merrill Lynch. Please go ahead. Eddie Leung – Banc of America/Merrill Lynch: Good everyone. I have a question on the fourth quarter number of brand advertisers. Carol, could you give us the number of brand advertisers? And also, a follow-up question on the online video side. When we could see from a period contribution from online video, are we talking about a timeframe of one to two years or longer than that? Thanks.

I will answer the first part of the question first. It’s around 700. Eddie Leung – Banc of America/Merrill Lynch: Thank you.

You mean, a timeframe for online video pickup?

For the revenue that become meaningful.

Meaningful? I think in two years. You will see in 2010, it will become kind of meaningful, but in 2011, it will be pretty meaningful.

I think let me put it this way. Given our current strategy of putting a lot of emphasis in online video and de-emphasizing for example, the DSP businesses for wireless, I am sure, pretty sure that unless something drastically happens, we probably should be seeing that, the revenues from online videos surpassing our wireless business or making up the loss in the wireless business in two or three years.

For online video business, our success also depends on the industry shift, which Sohu is actually the driver for this. The driving basically is fighting online piracy, so that enable companies like Sohu who have authorized content enable to compete. Over the year 2009, I think our efforts in fighting piracy has resulted in some very good progress that (inaudible) been pressured to delete some of their pirated content and this trend will continue as more and more sites are starting to pick the site of justice, rather than, you know, against the trend of history. So, this is one trend that Sohu is leading. And also on other hand, fighting piracy at the same time, spending to buy content. So, these two efforts that we have been doing and will result in user growth and other timing model follows.

(Operator instructions) Next question comes from Kathy Chen from Goldman Sachs. Please go ahead. Kathy Chen – Goldman Sachs: Questions, I have a couple of questions on the advertising side. Firstly, just a follow-up again on the first quarter advertising guidance, is it possible to quantify how much the impact is from the later Chinese New Year this year? If we have historically in the first quarter, you advertising revenue trends are usually more stable or flattish quarter-on-quarter. So, is the quarter-on-quarter decline you are guiding for this here primarily due to the later Chinese New Year? And then secondly, if I could ask a follow-up of another question regarding the second quarter outlook, I think usually you raise the rate cards in April every year, is there any indication here on how much Japan should raise the rate card side this April? Thank you.

It’s really difficult to quantify the timing, but we probably lose, I would say roughly another two weeks because of the Chinese New Year, the after timing of the Chinese New Year. So, that would be probably two weeks out of six weeks or seven weeks. So, I mean, if you really need to do that quantification, this is probably some ballpark numbers. And in terms of rate card increase, we always do that every year. So, I don’t see why we should change that, or I haven’t heard that we would change – we have any plans to change that yet. Kathy Chen – Goldman Sachs: Is there any thoughts here on how much you would raise the rate card by?

A commercial secret. Kathy Chen – Goldman Sachs: Okay, thank you.

Next question is coming from Jenny Wu from Morgan Stanley. Please go ahead with your question. Jenny Wu – Morgan Stanley: Hi. Thank you for taking my questions. Hi Carol, my question is regarding your margin. Giving your spending on content, especially radio content and your marketing campaigns for 2010. So, what’s your budget disposal for content costs and your marketing costs, and what’s the impact on your margin in or maybe shortly, what expectations for your margin trends? Thank you.

I think the margin would top for – you are talking about advertising side, right, gross margin? Jenny Wu – Morgan Stanley: Yes, yes, sure.

Okay, I will start with that. I think on the gross margin side, I would expect that to be – what we found in Q2 and after, Q2 that we found in advertising revenue because the sharp dip in Q1, the bulk of it relates to the smaller revenue base as well as a lot of costs are fixed in nature. I would believe that it’s probably on the year-on-year basis, would probably rebound to 2 basis points below that of 2009 Q4 for the whole year, at least that’s what I am working to it. In terms of marketing expenses, we probably just would rise in mind with revenue growth from last year. So, based on the revenue base, so that’s what I have in mind. Jenny Wu – Morgan Stanley: Okay, sure. Thanks.

Next question is coming from Steve Weinstein from Pacific Crest. Please go ahead with your question. Steve Weinstein – Pacific Crest: I was hoping if you could update us a little bit more in terms of the communication you are having with the carriers regarding your wireless businesses. What are some of the issues they are trying to address, and you know, what change you may think or you may need to make to your different products, I mean going forward, and when you can take some resolutions?

Because of the government’s crackdown on, you know, pornography and others, so the operators stopped the WAP dealing. That’s one of the major policy change that impacted our wireless business. And as moving forward, I think the wireless business already, I think will be evolving in nature. While the traditional value-added services has been always been on a declining trend, the mobile handsets has its computing power and its sophistication, it’s approaching a PC, so that the mobile Internet strategy is more like, you know, another battlefield for the general products. So, we are now focused more on research and development of the product with mobile handset. For example, the Sogou Pinyin, we will make sure that we will repeat the success with the PC base. Steve Weinstein – Pacific Crest: Okay, thanks.

Thank you. Next question is coming from Eric Quinn [ph] from MAR Securities [ph]. Please go ahead with your question. Mr. Eric Quinn from MAR Securities, your line is open. Please ask your question. Eric Quinn – MAR Securities: Hi, Thanks for taking my question. I have two questions if I may. Number one is, can management outline the licensing fee structure for Chinese Hero, if it’s not commercial? And the second, I have a follow-up question regarding percentage of revenue, advertising revenue from video and how does the management fees driving the growth going forward? Thanks.

The license fee for Chinese Hero is two parts. One is the initial licensing fee plus the revenue sharing. For the initial licensing fee, that has been paid and has already been effected in the balance sheet of Changyou as intangible asset. For the licensing revenue sharing, typically, for licensing deal in China, the revenue sharing is of the range of 20% to 30% sharing. Eric Quinn – MAR Securities: Thanks. And is there any minimum guarantees in the licensee you see at part?

That’s a bit too detailed for disclosing a commercial transaction. Eric Quinn – MAR Securities: Okay, I understand. Thanks. So, second question is on the video ad, did I say correct that, Charles, you said it has increased 27% quarter-on-quarter in the fourth quarter?

Correct. Eric Quinn – MAR Securities: Well, how much is that? Is it immaterial at this point or can you disclose the percentage of total advertising that comes from video?

No, no. As I said, it’s going to be somewhat meaningful in 2010 and then it will be pretty meaningful in 2011. Eric Quinn – MAR Securities: Okay.

I cannot disclose the percentage.

Actual amount.

Actual amount. Eric Quinn – MAR Securities: Okay. Thank you.

(Operator instructions) Next question is coming from Wendy Huang from RBS. Please go ahead with your question. Wendy Huang – RBS: Thanks for taking my question. Regarding your wireless guidance, you guide 2.7 million revenue decline in Q1 2010, actually even if we wipe out all the WAP revenue for Q1, it’s just less than 1 million. So, I wonder whether are there any policies coming from the China Mobile or MMIC [ph] that affect your other wireless services such as SMS?

There is a stricter policy on the embedded. Wendy Huang – RBS: Yes.

Also, there is, you know, a stricter policy out for restricting the embedded product that deal some SMS wireless value-added services products. Wendy Huang – RBS: So, that’s mainly on SMS, and you didn’t see any impact on the MMS, the others?

No, it’s just this practice is not being allowed in the future, to embed some function in the mobile handset that induce some service. Wendy Huang – RBS: I see. And also regarding the seasonality you mentioned about ad business, actually in 2007, the Chinese New Year is February 18th; in 2008, the Chinese New Year is February 6th. They are very similar to this year, but in those two years, you actually still see the slight sequential growth in Q1 for two years. Why did you guide it, such a dramatic decline this year?

In 2007, we had the run-up to Olympics. So, advertisers start to do some of the advertising then. Wendy Huang – RBS: Okay, that’s fair. Thank you.

We are now approaching the end of the conference call. I will now turn the conference over to Sohu’s Investor Relations Representative from Ogilvy Financial, Mr. Derek Mitchell for closing remarks. Thank you, sir.

Once again, I would like to thank all of you for joining us on today’s call. If you have any follow-up questions, please do not hesitate to contact Sohu at ir@contact.sohu.com. Thank you.

Thank you. Thanks for your participation in today’s conference call. This concludes the presentation. You may now disconnect. Have a great day. Thank you.