In terms of financial composition, games are the pillar of revenue. In the first quarter, Sohu brand advertising revenue was 26 million US dollars, down 40% year-on-year; search and search related advertising revenue was 238 million US dollars, up 1% year-on-year; online game revenue was 133 million US dollars, up 35% year-on-year.
After the privatization of Changyou, the profits will all belong to Sohu company. We will further strengthen the integration of resources and better achieve the mutual agreement between Changyou and Sohu platform. Im very happy that Changyou privatization has been successfully completed, Zhang said
Zhang Chaoyang believes that the data are not representative due to the impact of the epidemic in the first quarter, and the second quarter, which is more than half of the time, is the focus of attention.
Sohu expects total revenue to be between $410 million and $445 million in the second quarter of 2020. After deducting the withholding income tax expected to be supplemented in the second quarter of 2020 of about US $88 million, the net profit attributable to Sohu under the non-U.S. GAAP is between us $5 million and US $5 million. After deducting the net profit of Sogou company, and further deducting the impact of the expected recognized withholding income tax, the non-U.S. GAAP net profit attributable to Sohu company is between us $0 and US $10 million.
Zhang Chaoyang judges, deduct Sogou influence, 2020 Sohu will realize profit. Why should we get rid of Sogou? There is no problem with Sogous cash flow. Over the years, we have made a lot of money. Now there are about one billion dollars in the account. The loss of one or two quarters has no impact on it. But for the group, it is very important that the groups cash flow is positive. The positive cash flow means watching the money on the bank account go up rather than down every quarter in the future, so its much more stable, Zhang said.
Although Sohu didnt achieve the three years back to the center of the stage in 2016, it did do a lot of things in the past few years to let Sohu breathe, Zhang said
Sohu is in a state of rejuvenation
All along, there is a voice from outside that Sohus market value is undervalued. What does Zhang Chaoyang think of it?
I shouldnt comment, but Ill explain why we underestimate it, because our long-term losses cause investors to be very worried. What if the money is burnt out? After two years of struggle, we first stopped the high investment in network drama, and now the cash flow of the group is positive, which is good news. If we can show our profitability in the future, the performance of the stock price should be good, which is a matter of time. Zhang said.
Our goal is not to compare our market value with others, Zhang said. Enjoy your work and make some excellent products. Its already very good. As for the market value, its a little less important.
Securities Daily reporter asked: you have interviewed Ma Yun has retired, then you have plans to retire? Zhang Chaoyang said with a smile, no, Im busy with the ZTE of Sohu. Im having a good fight. I have a long working time now, from 7:00 a.m. to 7:00 p.m. a day, and I have meticulous management, especially in this year and a half, the management is much more meticulous than before.
Zhang Chaoyang stressed that Sohu is in a state of ZTE, we will start to make profits in the second quarter, and the following is to seek development. ZTE means that we should start to seek development.. We are the first Internet company in China. We used to be brilliant, but later we were a little marginalized. After many years, we need to rise again. I want to rebuild my life.
I believe in the power of repetition. I believe in the power of doing things conscientiously and being able to iterate and provide the best quality things, Zhang said. I didnt do it in the past. At that time, I felt a little bit like shaking off the shopkeeper. Now I am back and really in-depth management. I believe that it can produce good results. Now the improvement of finance makes me more confident.
I really think its a turning point for the company, and I hope investors will realize it as well. Zhang Chaoyang finally said.