Sohu’s “return” has taken seven years.

文 | 宋子 乔

Edit | Chen Ziyang

Sohu (USU.US) seems to be getting farther and farther away from the Internet center. Correspondingly, Zhang Chaoyang, chairman and CEO of Sohu, set various goals for Sohu’s “return to the Internet center.”

Actually, not long ago, it just turned in a good report card. On March 9, Sohu disclosed its Q4 and full-year results for 2019. The biggest highlight of the performance is that Sohu achieved a non-GAAP of $ 7 million in a single quarter.

On the day of the earnings report, Sohu’s stock price opened up against the trend, and the next day’s stock price rose by more than 6%. However, this round of rally has not been able to continue. Since its Q4 financial report was released, Sohu’s market value has evaporated by about 83.56 million US dollars in 17 days.

Focus analysis | The main business is weak and innovation is hard to surprise. How does Sohu

Source: Oriental Fortune

Market feedback is not traceless. In the competitive Chinese Internet world, Sohu has never created a surprise. At the media communication meeting after the release of the Sohu Q4 earnings report, Zhang Chaoyang frequently mentioned that Sohu was “surprisingly upright.” As early as at the 2020 Sohu World Conference held on December 18 last year, Zhang Chaoyang explained it. The mobile phone Sohu has a lot of browsing; ‘Surprise’, based on new social networking products such as innovative fox friends. “

Did Sohu do it?

The profitability of “more worry than less”

Carding found that Sohu had its first loss since Q3 of 2013, and in the next 26 quarters, only 4 quarters achieved profit.

The three “reversal points” before this quarter are also short-lived: after Q4 of 2013, Sohu harvested a small profit and the loss period lasted for 6 quarters; Q3 of 2015 was the highest quarter for Sohu in the past 6 years, but In the past 10 quarters, Sohu’s loss range showed an increasing trend. In Q4 2018, Sohu achieved profit under the US GAAP, but failed to maintain this trend in the next 3 quarters.

Focus analysis | The main business is weak, and innovation is hard to surprise. How does Sohu

Focus analysis | The main business is weak and innovation is hard to surprise. How does Sohu

Sohu’s profit trend in the past 7 years

Data source: Sohu financial report; Mapping:

Although Sohu’s losses in the past five quarters have been shrinking, from the perspective of its revenue and expenses, in Q4 2019, Sohu’s revenue growth rate doubled year-on-year, and Q3 and Q4 operating expenses Continue to decrease. This means that Sohu’s earnings or “throttling” results have begun to show results this quarter.

Focus analysis | The main business is weak and innovation is hard to surprise. How does Sohu

Data source: Sohu financial report; Mapping:

“Positive” is difficult to defend: fierce competition in the media business

Before the first loss in 2013, Sohu has begun its own “reengineering” road.

The goal of “Reinventing Sohu” began in 2010. At that time, Zhang Chaoyang announced that the company’s business focus on Sohu Weibo, search, video, and games, of which Weibo is the key development target. However, in the fierce competition, Sohu Weibo failed to win.

In 2013, “Return to Media” and “Open Source and Throttling” became the main tone of Sohu. And whether it is the “rebirth” plan issued by Zhang Chaoyang in 2015, or the slogan he proposed to return to the Internet Center in 2018. For 7 years, Sohu has been struggling with the four major businesses of portal, search, video, and games.

But Sohu PowerThe “main business” held by Tu is a red sea.

Search is the main revenue pillar of Sohu’s . From 2010 to the present, the year-on-year growth rate of its search and search-related advertising revenue business has continued to slow down.

Focus analysis | The main business is weak and innovation is hard to surprise. How does Sohu

Data source: Sohu financial report; Mapping:

Focus analysis | The main business is weak and innovation is hard to surprise. How does Sohu

Data source: Sohu financial report; Mapping:

Sogou hosts Sohu’s main search services, which are mainly input method, browser, and search services.

According to the statistics of China Internet Information Center (CNNIC), the brand penetration rate of Sogou Search is 37.4% lower than that of Baidu Search. Judging from the preference rate of search engine users on mobile phones, the preferred rate of Sogou Search ranked second is only 13.9%, which is far less than Baidu Search (66.8%). From the perspective of mobile phone penetration, Sogou Browser Ranked fourth with a penetration rate of only 25%.

Focus analysis | The growth of the main business is weak, and innovation is hard to surprise. How does Sohu