The Internet in China is an established medium particularly for the urban youth, who are spending more time online at the expense of watching television, making it the most effective marketing vehicle for companies to target this highly attractive segment in the Chinese market.

The Company is quickly realizing its goal of building a sustainable and diversified business model on two strong pillars: a steadfast home-market corporate advertising base and a massive, paying user population.

With over 50 million registered users at the end of September 2002, SOHU has the largest online user base in China. It is a household name among the 300 million people living in urban centers. For the second year in a row the Sinomonitor International survey - the largest Internet Survey in the country- ranked SOHU.COM as the most visited portal in China.

SOHU, with its exclusive focus on the China market, is operating in a high-growth industry under compelling market conditions. The Chinese Ministry of Information Industry (MII) predicts that the Internet sector will grow to 200 million users by 2005.China's economic growth is expected to remain robust in coming years as the country is opening up further under the terms of WTO membership and preparations intensify for the 2008 Beijing Olympics and the 2010 Shanghai World

TELEVISION

In 1978, China had less than one television receiver per 100 people, and fewer than ten million Chinese had access to a television set. Current estimates indicate that there are now about 25 TV sets per 100 people and that roughly a billion Chinese have access to television. Similarly, in 1965 there were 12 television and 93 radio stations in China; today there are approximately 700 conventional television stations — plus about 3,000 cable channels — and 1,000 radio stations.

China Central Television

China Central Television or Chinese Central Television, or CCTV is the major broadcast television network in Mainland China. Organizationally it is a subministry of the China's central government within the State Administrator of Radio, Television, and Film and as such it does not have any editorial independence from the PRC government.

Its news reporting follows parameters directed by the Propaganda Department of the Communist Party of China. Most of its programming, however, is a mix of comedy and dramatic programming, the majority of which consists of Chinese soap operas. Like many media outlets in China, CCTV has had its state subsidy reduced dramatically in the 1990s, and hence finds it necessary to balance its role as a government agency with the practical fact that it must attract viewers so that it can sell commercial advertising. In searching for viewers, CCTV has found itself in competition with local television stations (which are also state run) which have been creating increasingly large media groups in order to compete with CCTV.

CCTV first broadcast on September 2, 1958 under the name Beijing Television, after an experimental broadcast on May 1. The name was changed to CCTV on May 1, 1978.

CCTV has sixteen different channels of programming content and competes with television stations run by local governments (such as BTV and several regional channels) and foreign programming which can be readily received via satellite television. Unlike US channel naming conventions, but similar to the situation in many countries in Europe, CCTV channels are listed in sequential order with no discerning descriptions, e.g. CCTV-1, CCTV-2, etc.

Outside China, it is only possible to receive channels CCTV-4 (overseas channel) and CCTV-9 (overseas channel targeted at an English-speaking audience) via a Digital Video Broadcast signal. CCTV has just recently switched from analog to DVB primarily due to better signal quality and the ability to charge for reception (about 10 USD per year subscription). The aforementioned overseas channels are relayed off many different satellites around the world.

CCTV now has 16 channels. They are:

CCTV-1 Mixture

CCTV-2 Economy

CCTV-3 Arts

CCTV-4 International channel in Chinese

CCTV-5 Sports

CCTV-6 Movie

CCTV-7 Children's/Military/Agriculture

CCTV-8 TV drama

CCTV-9 International channel in English

CCTV-10 Science and Technology

CCTV-11 Opera

CCTV-12 Society and Law

CCTV-News -- 24-hour News

CCTV-Children -- Children's channel

CCTV-Music -- Music

CCTV-E&F -- International Broadcast in Spanish and French

Television broadcasting is controlled by Chinese Central Television (CCTV), the country's only national network. CCTV, which employs about 2,400 people, falls under the dual supervision of the Propaganda Department, responsible ultimately for media content, and the Ministry of Radio, Film, and Television, which oversees operations. A Vice Minister in the latter ministry serves as chairman of CCTV. The network's principal directors and other officers are appointed by the State. So are the top officials at local conventional television stations in China — nearly all of which are restricted to broadcasting within their own province or municipality — that receive CCTV broadcasts.