Sohu.com says 1Q profit quadruples

Sohu.com Inc. said Tuesday its first quarter profit quadrupled on strong advertising and online game revenue.

For the three months ending March 31, Beijing-based Sohu said it earned US$21.6 million (euro13.8 million), or 55 cents (35 euro cents) per share, up from US$4.5 million, or 12 cents per share, for the same quarter of 2007.

Revenue surged 156 percent to US$84.8 million (euro54.4 million), it said.

The company said its revenues were strong despite a quarter that included the Chinese New Year, usually a slow time for Chinese business, and the country's worst snowstorms in decades.

"Despite a generally weak season in the industry for the first quarter of the year, we were able to achieve yet another record in terms of brand advertising revenues," Belinda Wang, Sohu's co-president and chief marketing officer, said in a statement.

Explosive growth in Chinese Internet use is driving a sharp rise in profits at online companies.

China's population of Internet users rose to 221 million in February, possibly tying the United States as the world's largest, the official Xinhua News Agency said last week, citing government data.

Sohu is the official Internet portal for the Beijing Olympics in August.

"Looking ahead at the remainder of 2008, we believe the growth of our brand advertising business will be even stronger, primarily driven by the increasing Olympic-related advertising spending and our growing penetration in the overall market," Wang said.

In U.S. trading, Sohu shares rose 11.6 percent to US$69 after earlier setting a record of US$70.74.

Sohu said its total first-quarter advertising revenue was US$34.8 million (euro22.3 million). Brand advertising revenue rose 40.9 percent to US$33.2 million (euro21.3 million) as advertisers move online and step up Olympics-related spending.

Non-advertising revenue, which includes online game and wireless value-added services revenues, rose 570 percent to US$50.1 million (euro32.2 million). Online game revenue rose US$39.3 million (euro25.2 million) to US$41 million (euro26.3 million), helped by the performance of the game "Tian Long Ba Bu," which reported US$38.9 million (euro25 million) in sales.