Sohu – Major marketing push

My last post that relates to Sohu’s advertising business can be found here:
http://chinese-net-gaming-stock.blogspot.com/2009/03/chinas-internet-advertising-market.html

From the following article:
http://tech.163.com/09/0409/04/56EAL64Q000915BF.html

Sohu had already started a major marketing campaign to broadcast the Sohu brand. Starting early April, it had purchased ads on CCTV. It had purchased advertising time on multiple programs on multiple CCTV channels. CCTV is by far the number 1 TV station in China and the cost of its air time is extremely expensive.

In addition, banners were purchased on buses of all major cities throughout China. Just Beijing alone, Sohu’s banner can be found on 1000 buses.

Through the IPO of Cyou, a proceed of $120 million USD is obtained. Sohu gets half of that. That money allows for this major marketing campaign.

Sohu is no longer a pure portal now. It is now a multimedia platform. The purpose of this major marketing push is to inform the Chinese citizen of Sohu’s new integrated platform.

Right now, Sina is in the mist of integration problems with Fmcn. In addition, Sohu is going up against Bidu, Tencents, and major video portals.

Sohu had build a tremendous amount of products and she needs average Chinese to know about these new products.

In the next article, I will talked about this new multimedia platform.

As a long term investor, I like Sohu’s execution and potential for great growth. It will not just grow as a portal, but it would start to branch out to many other areas of new growth.

But it is possible that there might be some margin pressure in the short term.