Sohu.com
Perhaps the biggest surprise is that it Sohu's online gaming division -- fueled by the runaway success of its Tian Long Ba Bu multiplayer fantasy game -- is leading the way. Internet games now make up 47% of total revenue at Sohu, more than the company's bread-and-butter online advertising. A year ago, Sohu was a fringe player in this niche, relying more on its Web portal and wireless content services to bring home the bacon.
However, just as NetEase.com
Not that there's a water shortage. Shanda Interactive
Things are going so well for Sohu that the company is planning to take its online-gaming division public, under the name Changyou.com, to maximize shareholder value, while also freeing up the company to focus on its flagship online media endeavors.
One can't forget about Sohu's non-gaming businesses, especially given its role as the official Internet reporter for the upcoming Olympic Games in Beijing. The exposure alone will help Sohu land more visitors and advertisers.
Ultimately, investors are left with a company that's widening the gap between its reality and what Wall Street thinks is going on.
I figured Sohu couldn't improve on its first-quarter performance, when it earned 49% more than analyst expectations, but this morning, it came in 52% ahead of Wall Street's $0.67-per-share profit target.
EPS Est. |
EPS Actual |
% Difference |
|
---|---|---|---|
Q2 2007 |
$0.13 |
$0.15 |
15% |
Q3 2007 |
$0.21 |
$0.25 |
19% |
Q4 2007 |
$0.31 |
$0.39 |
26% |
Q1 2008 |
$0.37 |
$0.55 |
49% |
Q2 2008 |
$0.67 |
$1.02 |
52% |
Spot the trend? See how Sohu is not only consistently topping expectations but also doing it by an increasing margin? That's as encouraging a sign as an investor is going to get in the market these days.
Tiang Long Ba Bu is a hot game, but this one is even hotter.
Other Olympic-style games to play in China: