SOHU / CYOU Joint Presentation

June 2009

SOHU.COM INC. (NASDAQ: SOHU) 1 Safe Harbor Statement This presentation contains forward-looking statements, including, among other things, a statement of Sohu’s expectations regarding future profitability. 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 statement. Potential risks and uncertainties include, but are not limited to, the current global financial and credit markets crisis and its potential impact on the Chinese economy, the slower growth the Chinese economy experienced during the latter half of 2008, and first quarter of 2009 which could continue through the remainder of 2009, uncertain regulatory landscape in the People's Republic of China, fluctuations in Sohu's quarterly operating results, Sohu’s historical and possible future losses and limited operating history, and the company's reliance on online advertising sales, online games and wireless services (most wireless revenues are collected from a few mobile telecom operators) for its revenues. Further information regarding these and other risks is included in Sohu's Annual Report on Form 10K, its quarterly reports on Form 10Q, and in its other filings with the Securities and Exchange Commission.

2 Two Core Businesses

Sohu Portal - Changyou - Mainstream Media Platform Leading MMORPG Company

„ Strong brand recognition Cross Fertilize „ Acquire new users, especially teenagers „ User base of ~250m „ Contributes to revenue/ „ Advertising resources earnings/ cash flow „ Industry expertise of 17173 - China's largest gaming portal

„ Portal business: one of the most powerful mainstream media platforms in China „ Online game business conducted by CYOU: a leading company in the MMORPG industry „ The combination of the two businesses enables SOHU to deliver sustainable growth through various economic cycles

3 Successful IPO of Changyou.com (NASDAQ:CYOU)

„ CYOU’s IPO on 2 April 2009 was one of the most successful IPOs in US market in the past 12 months „ IPO provides CYOU the platform and resources to compete head to head with first tier players „ Sohu, as the majority shareholder, holds approx. 65.7% equity interest (on a fully-diluted basis) and approx. 80.8% voting power „ Sohu will be a long term beneficiary of Changyou’s performance as a leading MMORPG company

4 Financial Track Record

2009 Q2 2008 Q4 2009 Q1 Q-o-Q % 2008 Q1 Y-o-Y % Guidance Total revenues $121.6m $115.7m -5% $84.8m 36% $121m~125m Brand advertising $45.0m $39.1m -13% $33.2m 18% $42m~44m Online games (CYOU) $58.4m $61.6m 6% $41.0m 50% $63m~65m Operating margin (non-GAAP)* 43% 45% N/A 40% N/A N/A

Net income before NCI (non-GAAP)* $59.0m $46.9m -21% $25.1m 87% $44m~46m

Diluted EPS before NCI (non-GAAP) * $1.50 $1.20 -20% $0.64 88% $1.13~1.18 Net income after NCI (non-GAAP) N/A N/A N/A N/A N/A $31m~33m

Diluted EPS after NCI (non-GAAP) N/A N/A N/A N/A N/A $0.80~0.85

Cash Balance ** $314m $373m 19% $160m 133% N/A

Debt Balance $0 $0 N/A $0 N/A N/A

Cash inflow from operations $61m $57m -7% $40m 4% N/A

* Non-GAAP operating income, net income and diluted EPS exclude the effect of share-based compensation expense under SFAS123R , effective January 1, 2006.

** All are RMB and USD deposits in reputable banks. No derivative transactions.

5 Delivered by a Strong and Stable Team

Title Years Title Years

Dr. Charles Zhang 13 Mr. Tao Wang 5 Chief Executive Officer Chief Executive Officer

Ms. Carol Yu 6 Mr. Alex Ho 5 Chief Financial Officer Chief Financial Officer

Ms. Belinda Wang 10 Mr. Dewen Chen 5 Chief Marketing Officer Chief Operating Officer

Mr. Xiaojian Hong 5 Chief Technology Officer

„ The management team has been making all the right moves over the past 2+ years and, flush with confidence and strong execution capability.

6 Portal Business: Brand Advertising

7 China Online Advertising in the Weak Economy

„ Online media continues to gain market share from traditional media

− Ongoing advertising budget shifts from offline to online

− Expansion of Internet penetration

− Increase of Internet media consumption rate

„ Advertisers concentrate ad spending on leading Internet sites

„ Benefit of online marketing in a restrained budgetary environment

− Efficiency and effectiveness

− Direct measure results

8 Performance by Industry

„ Top 3 industries (auto, online games and real estate) contributed over 40% of brand advertising revenues in Q1

„ Auto: continues to be top-performing in 2009

− New car models in 2009 are expected at the same level of 2008

− Continuous shift from offline to online marketing

„ FMCG: less affected by weak economy, continuous growth expected

„ Real estate: Seeing recovery… Revenue for Q2 is expected to double that of Q1

„ Online games: flattish, top game operators continue to promote their products, small operators are largely affected by weak economy

9 Ongoing Investments in Branding, Sales & Marketing, and Technology Paying off „ Continue to see year-on-year growth in brand ad revenues:

− Q109: 18%

− Q209: 0%~5% (guidance)

− 1H09: 8%~11% (includes Q2 guidance) FMCN ($ million) SOHU TENCENT SINA NTES (Internet Ad) Q108 33.2 20.6 49.6 47.8 11.0

Q109 39.1 21.4 47.2 43.2 6.0

Y-o-Y 18% 4% -5% -10% -45%

„ Continue to see user growth even after the Olympics:

− For the remaining 4 months in 2008, UV jumped 70%~90% year-on-year − In 2009, except for May (with Sichuan earthquake in 2008), UV grew by ~50% year- on-year

10 Branding Campaigns

„ “Browse Sohu, Know the World” from March to September

− China Central Television commercials

− A series of interactive activities with Internet users to raise Sohu's public visibility

z Complete coverage throughout 1st to 4th tier Chinese cities

11 Step-up Efforts in Video Content

„ High definition online video content on Sohu’s TV channel

− Unique visitors to Sohu’s TV channel increased rapidly

− High quality authorized video products are gaining popularity

− More Sohu advertisers are seeking ways to build Sohu’s TV channel into overall online marketing plans

12 Technology and Product Development

„ Steady investments in upgrading groundbreaking internet tools, such as Sohu Pinyin, Browser, search engine, and SNS product offerings − Sogou Pinyin continues to expand market share due to superior product

quality and effective marketing campaigns z Installed by more than 60% of PCs in China and continues to strengthen the leading position z Supported by a vast word database (including 1 billion Chinese names) to increase typing efficiency z With ~17,000 Skins downloadable to keep the interface fresh-looking z Mobile version well received by users

13 Resource Allocation Focused on Content and Technology

Sohu Portal Employees %

Content 1,384 56%

Tech 663 27%

Sales & CS 284 12%

Corporate 114 5% Total 2,445 100%

14 Online Games: CYOU

15 Company Overview

„ Leading online game developer and operator in China − Focus on massively multi-player online role-playing games (“MMORPGs”) under an item-based revenue model Business „ Currently operates 2 games – Tian Long Ba Bu ("TLBB“) and Blade Online ("BO") „ Close relationship with Sohu provides a unique competitive advantage „ Games pipeline: Duke of Mount Deer, Immortal Faith, Legend of the Ancient World

„ For 1Q09, aggregate peak concurrent users (“PCU”) for both TLBB and BO reached Metrics 970,000 and aggregate active paying accounts (“APA”) reached 2.27 million „ TLBB – For 1Q09, approximately 875,000 PCU and 2.11 million APA

(USD million, except for ratios) 1Q08 4Q08 1Q09 QoQ YoY 2Q09E „ Net revenues 41.0 58.4 61.6 6% 50% 63.0-65.0 Key „ Non-GAAP(1) Gross margin 92% 93% 94% N/A N/A Financial „ Non-GAAP Operating margin 57% 60% 63% N/A N/A Data „ Non-GAAP Net income 17.2 30.3 34.4 13% 100% 37.0-38.0 „ Non-GAAP Net margin 42% 52% 56% N/A N/A „ Free cash flow(2) 26.0 26.5 61.3 131% 136%

Employees(2) „ 690 total employees (260 R&D employees) as of March 31, 2009 Notes: (1) Excludes share-based compensation expenses (2) Free cash flow = Net cash provided by operating activities - capital expenditure

16 Company History and Key Milestones

Stage 1 Stage 2 Stage 3 In house development Entry into online game market Strategic expansion of TLBB

„ Commercially „ Sohu’s online „ Commercially launched TLBB „ Development of DMD games launched BO and licensed 2 business „ Numerous awards additional games „ Development commenced for TLBB from third parties operations of TLBB „ Licensed TLBB to Taiwan, Vietnam, „ MMORPGs Hong Kong, Malaysia and Singapore Carve-out IPO

2000 2003 2004 2007 2008 2009

„ Sohu „ Acquired „ Acquired „ Launched „ Official Internet completed content service sponsor IPO on of Beijing 2008 Olympic Games NASDAQ „ Brand advertising „ Sponsored search „ Wireless VAS

17 Game Portfolio Overview

Existing games Pipeline games

Tian Long Ba Bu Blade Online Duke of Mount Deer Immortal Faith Legend of the Ancient Game title (“TLBB”) (“BO”) (“DMD”) (“IF”) World (“LAW”)

Graphics 2.5D 2.5D 2.5D 2D 2.5D

„ Martial arts „ Martial-arts-style „ Cartoon-style martial „ Chinese myths and „ Martial arts and „ Adapted from the fighting arts folklores fantasy popular Chinese novel „ Set to the backdrop „ Adapted from the „ Set in ancient China Theme “Tian Long Ba Bu” of a Chinese myth popular novel “Duke at the beginning of written by Louis Cha of Mount Deer” written Chinese civilization by Louis Cha

„ A combination of both „ First action / fighting „ Targets a broader „ Emphasis on fighting „ Targets game martial arts-style- online game audience than TLBB players in late-teens Special features fighting and developed in China by using cartoon-style to late 20s who enjoy community-building graphics and other reading fantasy among game players features literature

Developer Developed in house Purchased with full Developed in house Licensed from third Licensed from third (Game (31 months) development rights (23 months)(1) party party development time)

Notes: (1) As of the date of this presentation.

18 Investment Highlights

1 Leadership position in China’s growing online game market

Player feedback system and continual game enhancements ensure sustained 2 long-term franchise

3 Advanced technology and game development platforms

Ongoing relationship with Sohu drives significant user traffic and improves 4 games

5 Multi-pronged growth strategy

19 11 Leadership Position in China’s Growing Online Game Market – The Internet and Gaming Market: China’s New Favorite Pastime

China has surpassed the US as the largest Internet Increasing paying player penetration market – and still growing (Million) 500 70% 56.7% 57.3% 58.4% 59.6% 389.5 60% 55.7% 56.1% 400 348.8 372.4 319.0 50% 275.1 300 233.9 40% 200 30% 75.7 84.6 20% 100 48.3 57.3 66.5 40.2 10% 0 0% 2007A 2008E 2009E 2010E 2011E 2012E 2007A 2008E 2009E 2010E 2011E 2012E Internet users in China Online game players in China

Macro trends driving robust online game revenue MMORPGs remain the game of choice for players in growth China (USD billion) 2007A2007A onlineonline gamegame revenuesrevenues breakdownbreakdown 5.0 : 19.9% Casual games E CAGR 4.0 7A – 12 3.4 24.0% 0 3.1 2.8 3.0 2.4 1.9 2.0 1.4 1.0

0.0 MMORPGs 2007A 2008E 2009E 2010E 2011E 2012E 76.0% China online game revenue Source: IDC’s China Gaming End-User Survey 2008 and IDC’s China Gaming 2008-2012 Forecast and Analysis. Large market opportunity for Changyou

20 11 Leadership Position in China’s Growing Online Game Market – TLBB: One of the Most Popular Online Game Titles in China One of the most popular online game titles in China

Key game features „ Developed in-house and adapted from the popular Chinese novel “Tian Long Ba Bu” written by Louis Cha − Millions of copies of his novels have been sold in numerous languages „ Unique combination of two popular game styles - martial arts-style-fighting and community-building

− Fighting-based games tend to attract high participation in early stages due to exciting content − Community-based games have a longer lifespan as relationships among users strengthen over time

„ 2.5D graphics engine

− Balances graphics quality and PC hardware requirements to maximize game player base in China

Numerous awards Best Self- Most Liked Most Popular 3rd Most 2nd Most Popular Developed Online Games Martial Arts Popular Online Online Game among Online Games by Game Online Games Game in China Locally-developed (1st Place) Players Baidu.com’s game IDC, 2007 Online Games ChinaJoy, 2008 (1st Place) player survey, IDC, 2007 ChinaJoy, 2008 2008

21 11 Leadership Position in China’s Growing Online Game Market – Building One of China’s Most Powerful Gaming Brands

China’s online game market has continued to evolve – franchise games that grow over a period of several years are a cornerstone of growth

1 2 3

Continue to grow Gradual increase Develop hit game user base in user monetization

(Year 1-2)

TLBB – Success to date

Revenues Quarterly PCU Quarterly APA Quarterly ARPU (‘million) (‘000) (‘000) (RMB)

70 1,000 875 2,500 200 176 $56.6 2,110 60 800 2,000 50 150 118 40 600 1,500 408 100 30 400 1,000 693 20 $10.9 50 10 200 500 0 0 0 0 3Q07 1Q09 3Q07 1Q09 3Q07 1Q09 3Q07 1Q09

22 22 Player Feedback System and Continual Game Enhancements Ensure Sustained Long-term Franchise

„ Collect game player’s feedback through multiple channels Feedback center and customer service − − Online surveys − In-game instant messaging team − Online discussion forums − 24-hour telephone hotline − Events for game players − Online and offline research The most popular online game portal in China

Data Collection „ 260 game development „ Review game player’s feedback personnel „ Timely communicate game „ Release regular game updates Analysis and player’s feedback to product Application once a week and expansion Integration development packs every few months „ In-depth analysis of industry data

Product development Game operation team team

Continuous integration of player feedback…

23 22 Player Feedback System and Continual Game Enhancements Ensure Sustained Long-term Franchise TLBB (‘000) EP6: EP8: Final Fun in the Imperial Battle Academy EP3: 1,200 New Year EP5: EP11 Version War Hero EP7: EP9: King of Kung Legend of the EP10 1,000 Fu Shadow EP2: EP4: Pre-official Desert Version Castle 800 EP1: Immortal 600 Instruction

400

200

0 1Q09 2Q09 3Q09 4Q09 Jul-07 Jul-08 Jan-08 Jun-07 Jun-08 Apr-08 Oct-07 Oct-08 Mar-08 Nov-07 Feb-08 Nov-08 Aug-07 Dec-07 Aug-08 Dec-08 Sep-07 Sep-08 May-07 May-08

Monthly PCU (May 2007 to Dec 2008)/ Quarterly PCU (2009 Q1)

Notes: EP refers to expansion pack. …drives continual growth momentum in both PCU and ACU

24 22 Player Feedback System and Continual Game Enhancements Ensure Sustained Long-term Franchise BO (‘000)

100

EP1(1): EP2: EP3: Soldiers from King Yu’s 90 Blade 2.0 Heaven Amazing Ride

80 Resurrection 70 of Gan Qi(2)

60

50

40

30 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

Quarterly PCU

Notes: (1) EP refers to expansion pack. (2) Launched by the original developer. …drives continual growth momentum in both PCU and ACU

25 33 Advanced Technology and Game Development Platforms

Overview of game development platform

Uniform online Proprietary Advanced data Anti-cheating / game 2.5D graphics cross- protection Anti-hacking development engine networking technology technologies platform technology

„ Future games „ Exciting visuals „ Network of „ Real-time „ Protection of developed with relatively “middle-man preservation of integrity of using existing low PC servers” game players’ game players’ uniform hardware data accounts and platform as requirements in-game blueprint experience

Comprehensive Local appeal Reliable and stable operation game features

Comprehensive platform ensures a high level of quality for future game offerings

26 44 Ongoing Relationship with Sohu Drives Significant User Traffic and Improves Games Unique relationship brings access to Sohu’s 250 million registered users „ New audience directed to the portal „ Increased online presence and reach

Ongoing relationship bringing mutual benefits

Marketing and Sohu ecosystem Pre-launch game review Strategic guidance operational support

„ Marketing across the Sohu „ Games are reviewed and „ Sohu remains as our majority „ Use of Sohu’s online payment Group and through Sohu’s critiqued by 17173.com’s shareholder - interest aligned platform – PEAK single-user ID system experienced game editors with Changyou prior to launch „ Marketing services „ Benefits from strategic Direct links to TLBB „ Exclusive access to this game guidance from Sohu, a leader and our other games development support in China’s Internet market for many years

TLBB ad on 17173.com

27 55 Multi-pronged Growth Strategy

Leverage success of TLBB and existing online game development platform to 1 develop new MMORPGs

2 Expand and diversify MMORPG offerings through licensing

Continue to employ and improve integrated game player feedback and game 3 enhancement system

4 Selectively expand into international markets

5 Focus on organic growth through building human capital and corporate culture

6 Pursue strategic acquisitions and alliance opportunities

We believe that growth opportunities will allow Changyou to become one of the leading online game developers and operators globally

28 Financial Overview

29 Strong Operating and Financial Results

Financial summary

(USD million) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09E FY07 FY08

Revenues 41.0 47.9 54.6 58.4 61.6 63.0-65.0 42.1 201.8

Growth 70.8% 16.8% 14.0% 7.0% 5.5% 395.3% 379.3%

Gross profit 37.7 44.4 51.1 54.0 58.2 34.8 187.2

Gross margin 92.1% 92.7% 93.6% 92.5% 94.4% 82.6% 92.8%

Operating profit 21.2 27.9 32.5 33.8 37.9 5.2 115.4

Operating margin 51.8% 58.2% 59.5% 58.0% 61.5% 12.3% 57.2%

(1,2) Net income 15.2 27.2(1) 32.1 34.1(2) 33.5 5.3 108.6

Net margin 37.1% 56.8% 58.8% 58.4% 54.4% 12.6% 53.8%

EBITDA(3) 6.1 118.0

EBITDA margin 14.5% 58.5%

Free cash flow(4) 30.7 126.1 QoQ growth YoY growth Notes: (1) Excludes a non-recurring net tax adjustment amount of US$4.4 million. (2) Excludes a one-time withholding tax of US$5.0 million. (3) EBITDA = operating profit + depreciation + amortization. (4) Free cash flow = net cash provided by operating activities - capital expenditure.

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Strong Operating and Financial Results (cont’d)

Solid revenue drivers

Aggregate APA Average ARPU (‘000) (RMB)

2,500 200 192 195 2,270 (2) 176 177 179 (1) 2,006 1,980 2,000 1,875 1,807 1,758 150 142

1,514 1,500 114 1,243 100 85 1,000 836

50 500 347

0 0 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Q109 Q209 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 QTD QTD @ @ 2/24 5/24

Notes: (1) With a strong focus on expanding our user base, the Company further developed TLBB’s free-of-charge playing features in 4Q 2008. As some of the previous low-spending users became non-paying users due to their satisfaction with the enhanced free-of-charge playing features, APA for 4Q 2008 decreased slightly. (2) ARPU for TLBB dropped in 2Q 2008 because the Company focused on enhancing players’ in-game experiences, converting non-paying game players into paying game players and reducing the launches of new virtual items, with the goal of extending the lifespan of the game. We intend to maintain our ARPU at a level that is attractive to new and existing users.

31 Summary Balance Sheet and Cash Flow Statements

Key balance sheet items (USD million) Dec 2008 Mar 2009 Pro Forma(1)

Cash and cash equivalents 134.4 195.0 195.0

Short term loan from Sohu 8.5 8.5 8.5

Dividend payable to Sohu -- -- 96.8

IPO proceeds -- -- 55.8

Net cash balance 125.9 186.5 145.5(2) Notes: (1) Pro forma as adjusted for IPO, as of March 31, 2009. (2) Pro forma net cash balance of $160 million as of May 24, 2009.

Key cash flow items (USD million) FY2007 FY2008 1Q09 Change in working capital 13.5 18.2

Net cash provided by operating activities 35.5 133.9

Capital expenditure (4.8) (7.8)

Net cash provided by / (used in) financing activities (18.4) (7.3)

Free cash flow(3) 30.7 126.1 61.3 Note (3) Free cash flow = Net cash provided by operating activities - capital expenditure.

32 Our Goal: To be the leading online game developer and operator globally

Our Unique Formula for Success

High-quality games

Balanced growth Ongoing in both user traffic relationship and revenue with Sohu

33 Key Investment Takeaways

„ Winning formula - bound to deliver sustainable growth through different economic cycles

„ Strong, debt-free balance sheets - combined cash balance of over $500 million, with quarterly cash flow close to $60 million

34 Thank You!

35 Shareholding Structure of Changyou.com

No. of No. of Changyou's Changyou's ADSs used in ADSs used in computing computing Legally owned Sohu's Basic Sohu's Diluted Share- holders ADSs % EPS % EPS % Notes Sohu 35,125,000 68.5% 38,125,000 74.4% 35,125,000 65.7% <1>

Wang Tao 7,500,000 14.6% 4,500,000 8.8% 7,500,000 14%

CYOU Employee 0.0% 0.0% 2,198,000 4.1%

<2> Public share- 8,625,000 16.8% 8,625,000 16.8% 8,625,000 16.1% holders

Total 51,250,000 100% 51,250,000 100% 53,448,000 100%

<1>Sohu will include 65.7% of Changyou’s net income in computing Sohu’s diluted earnings per share when all existing restricted shares and restricted share units are fully vested.

<2>Sohu’s non-controlling interest in Changyou on a fully diluted basis is 34.3%.

36