on April 29, news, sohu has released its as of March 31, 2013 in the first quarter unaudited results. Results show that the first quarter of 2013 sohu total revenue of $308 million, up 36% from a year earlier, rose 3%; Attribution of sohu net profit of $23 million, up 14% from a year earlier, with the previous quarter.
after the earnings release, chairman and CEO Charles zhang, sohu, President and COO and wang, joint, President and CFO carol yu and other executives attended the earnings call, then a key points of interpretation results and answer questions from analysts.
the following main contents for question and answer session, an analyst at :
barclays analyst: sohu video advertising business at present and the following demand this year? The advertisers budget is still from offline media to online media? Can you specifically talk about online video competition situation, and compared with competitors in the field of sohu video advantage?
carol yu: video business overall performance is very good, at present most rivals has not yet been reported, but at least it seems to us video business than rivals, is still very competitive in the industry at present, but our content such as TV drama, “Chinese good voice”, and is very popular Japanese cartoon animation and so on, the user viscosity is very high.
barclays analyst: so is expected the growth rate of video business this year?
carol yu: video business growth rate of more than 17% in the first quarter of the year, this year is expected to at least keep the next level.
j.p. Morgan analyst: can you talk about gross margin trend, especially the sohu portal business gross margin?
carol yu: we expect the sohu group next gross margin level and the second quarter of this year.
j.p. Morgan analyst: sohu portal business spending is mainly for video business spending?
carol yu: online video is one of our strategic direction, the other is the mobile Internet, mobile Internet aspect we have not mass commercialization, competition also is same, we put on the mobile end.
j.p. Morgan analyst: last year’s income is about the video business?
carol yu: we do not publish this aspect.
, an analyst at Morgan Stanley: my question is about the mobile Internet, how many of your brand advertising revenues from mobile end? Sogou the growth of the mobile terminal flow for paid search what effect?
zhang: mobile end in view of the brand advertising business cash did not start, the search business is the same.
carol yu: search business mobile end we did not separate sell advertising (with PC search advertising sales), mobile search flow of the market share is about 5%.
since the third quarter of this year, we will begin to mobile video services for commercial cash, from some of the most popular video content such as “Chinese good voice” in the second quarter began.
, an analyst at Morgan Stanley: the growth of the mobile terminal flow cause a downturn of the PC flow?
zhang: we did not see PC flow rate did not decline, we actually PC portal flow rose more than 20% last year, because the mobile phone popular “sohu news” application, user so more likes to read news, we instead led PC portal traffic growth.
mobile client service commercialization can be started from the video, other similar liquid based on the content of the images or text, from the whole industry, all it will take a year or two to find suitable business model, and find out how to add advertising in the mobile platform.
Macquarie analyst: remove video ads and online real estate business and other advertising revenue growth rate? Can you comment on the current overall advertising market environment.
carol yu: around 25% to 25%.
wang: whole advertising sales appear restorative growth, the overall economic environment is improving. The fast-moving consumer goods (FMCG) industry advertising revenue is growing rapidly, drive the overall brand advertising revenue growth, other such as steady growth of automobile, finance and other fields.
Macquarie analyst: video field, your competitors are increasing investment in user-generated content, what is your strategy in this respect?
carol yu: actually we put in the aspect of user-generated content industry leader, we think it should be so don’t too propaganda this aspect, such as we have homemade drama “the dream silk man”, a short period of time playback volume has exceeded 100 million, also attracted much attention of advertisers. Homemade drama has we will launch a lot, and our content is aimed at Internet users and habits, with general TV series are different. So the user-generated content to help us cover more user groups.
zhang: we have a lot of popular diy programs, including “the dream silk man” “best wishes dapeng! Best wishes” and so on, and the sohu entertainment review “sohu entertainment broadcast” and so on, in entertainment news broadcasting industry in the lead, the programs for our platform has brought a lot of users.
piper jaffray analyst: you mentioned in the third quarter will begin to mobile video business commercial cash, then this spending will also increase?
carol yu: whether to the mobile terminal video to liquidate their business to the spending is not expected to have influence, our system is ready, just waiting for the right content in place, began to contact the advertiser.
piper jaffray analyst: will you specifically for mobile client to buy the corresponding content commercially to try?
carol yu: first began commercial content is “Chinese good voice” in the second quarter.
boci analyst: last time you mention this year have 18 to 20 months video business is profitable, now what are you going to start commercial mobile end, so the profit forecast time change?
carol yu: our plan remains the same.
, an analyst at Goldman sachs: search business is more and more fierce competition, your rivals intensify the traffic acquisition, in the long term of sogou competitive strategy?
carol yu: we are very confident sogou’s long-term development, we think sogou team in terms of innovation and ability has great advantages, such as sogou pinyin new function of “heart” unprecedented, would help sogou business development can be said to be the “killer application”.
, an analyst at Goldman sachs: in the mobile end all your products, what do you think to liquidate the biggest potential is products? In addition, your mobile applications are eating into PC product flow?
zhang: we move the commercial liquid can be started from video business, but in the long term, sohu news mobile phone applications will be realized commercialization is the most important, of course, sogou pinyin products, sohu news and sogou pinyin will be our mobile end the most potential product.
according to our experience, mobile terminal product doesn’t encroach on, it will help not only increasing the flow of PC and mobile phone news services we lead the industry, which in turn help PC portal strong growth.
ubs analyst: your video business rebates rate (e.g., the advertiser/advertising agency return cash or throw in the proportion of advertising) trends? How much of the video flow from the mobile terminal?
carol yu: video flow about 30% from the mobile terminal, as for rebates rate, we and competitors pay levels and competitors are basically identical.
analysts: about video advertising, you this year for the next growth relies mainly on the increase in the price or add more advertising on video??
residual ChuYuan: price, sohu video advertising prices basically close to the highest in the industry, so in addition to special popular content such as the third quarter will broadcast of the “Chinese good voice” and some of the TV drama, ads are not likely to add price. As for advertising length, patch before we video advertising is basically up to 45 seconds, so will not increase, but we’re in the middle of the add some innovative video broadcast ads and suspension and so on, but before the video posted AD won’t increase the length.
source: tencent technology