Fourth-quarter net income rises to $41.5 million on higher prices

HONG KONG - The owner of China's fourth-most visited website, Sohu.com Inc, posted a better-than-estimated 41 percent gain in profit after the company raised prices and boosted services such as video sharing.

Fourth-quarter net income jumped to $41.5 million, or $1.07 a share, from $29.4 million, or 76 cents, a year earlier, Sohu said in a statement on Monday.

The Beijing-based company was expected to post profit of $38.6 million, based on the average of eight analysts' estimates compiled by Bloomberg. Sales rose 27 percent to $173.2 million.

Sohu has increased spending on services such as its Sogou Internet search engine to add users and counter competition from websites including Tencent Holdings Ltd's Soso.com. and Youku.com Inc.

China's more than 450 million Web users are downloading more content using their mobile phones as wireless network speeds increase, the government said.

Changyou.com Ltd, the online-games unit of Sohu, increased fourth-quarter profit 23 percent to $47.8 million, according to a separate statement on Monday. Sales rose 30 percent to $91.7 million, helped by games such as Tian Long Ba Bu, it said.

Changyou.com Ltd, the online-games unit of Sohu.com Inc, was listed on Nasdaq on April 2, 2009. [Photo/CFP]

Changyou's American depositary receipts fell 1.1 percent to $31.55 on the Nasdaq Stock Market on Friday. Sohu rose 1 percent to $73.88.

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Brand advertising sales jumped 31 percent to $60.1 million, while sponsored searches more than doubled to $6.6 million, Sohu said.

Sohu forecast first-quarter revenue may rise to between $164.5 million and $169.5 million. This compares with the $161.5 million average of eight analysts' estimates compiled by Bloomberg.

Sohu raised advertising rates on some sites by 15 percent in October, according to a Jan 13 report by Morgan Stanley.

Sohu ranks behind only Baidu Inc, China's biggest search engine, Tencent's QQ.com, and Sina Corp in user traffic, according to China Websites Ranking, a site run by the Internet Society of China that compiles Web traffic information.

Bloomberg News