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Sohu.com Ltd

Sohu.com LtdSOHU決算レポート

Nasdaq

Sohu, Inc. is a Chinese Internet company headquartered in the Sohu Internet Plaza in Haidian District, Beijing. Sohu and its subsidiaries offer advertising, a search engine (Sogou.com), on-line multiplayer gaming (ChangYou.com) and other services.

What changed in Sohu.com Ltd's 20-F — 2023 vs 2024

Top changes in Sohu.com Ltd's 2024 20-F

686 paragraphs added · 744 removed · 591 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

263 edited+36 added−50 removed581 unchanged
As new devices are released or updated, we may encounter problems in developing and upgrading our products or applications for use on mobile devices and we may need to devote significant resources to the creation, support, and maintenance of such products or applications for mobile devices. 14 Table of Contents Our business depends on a strong brand; thus we will not be able to attract users, customers and clients of our products and offerings if we do not maintain and develop our brands.
As new devices are released or updated, we may encounter problems in developing and upgrading our products or applications for use on mobile devices and we may need to devote significant resources to the creation, support, and maintenance of such products or applications for mobile devices. 14 Table of Contents Our business depends on a strong brand; thus we will not be able to attract users, customers and clients for our products and offerings if we do not maintain and develop our brands.
Under the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company (“Offshore Share Incentives Rule”), issued by the SAFE on February 15, 2012, citizens of the Chinese mainland who are granted share options, restricted share units or restricted shares by an Offshore publicly listed company are required to register with the SAFE or its authorized branch and comply with a series of other requirements.
Under the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company (the “Offshore Share Incentives Rule”), issued by the SAFE on February 15, 2012, citizens of the Chinese mainland who are granted share options, restricted share units, or restricted shares by an Offshore publicly listed company are required to register with the SAFE or its authorized branch and comply with a series of other requirements.
We, and any of our employees or members of our Board of Directors who are citizens of the Chinese mainland have been granted share options, restricted share units or restricted shares, are subject to the Administration Measures on Individual Foreign Exchange Control , the related Implementation Rules, and the Offshore Share Incentives Rule.
We, and any of our employees or members of our Board of Directors who are citizens of the Chinese mainland and have been granted share options, restricted share units, or restricted shares, are subject to the Administration Measures on Individual Foreign Exchange Control , the related Implementation Rules, and the Offshore Share Incentives Rule.
If we, or any of our employees or members of our Board of Directors who are citizens of the Chinese mainland receive or hold options, restricted share units or restricted shares in us or any of our subsidiaries, fail to comply with these registration and other procedural requirements, we may be subject to fines and other legal or administrative sanctions.
If we, or any of our employees or members of our Board of Directors who are citizens of the Chinese mainland and receive or hold options, restricted share units or restricted shares in us or any of our subsidiaries, fail to comply with these registration and other procedural requirements, we may be subject to fines and other legal or administrative sanctions.
On October 20, 2021, the Ministry of Education of the People’s Republic of China (“MOE”), the SAMR and several other authorities in the Chinese mainland jointly issued the Notice on Further Strengthening the Administration of the Prevention of Primary and Secondary School Students’ Addiction to Online Games (the “Further Indulgence Prevention Notice”), which provides that online game operators may only provide online game services to minors on Fridays, Saturdays, Sundays and the Chinese mainland’s statutory holidays for one hour per day from 8:00 p.m. to 9:00 p.m.
On October 20, 2021, the Ministry of Education of the People’s Republic of China (the “MOE”), the SAMR and several other authorities in the Chinese mainland jointly issued the Notice on Further Strengthening the Administration of the Prevention of Primary and Secondary School Students’ Addiction to Online Games (the “Further Indulgence Prevention Notice”), which provides that online game operators may only provide online game services to minors on Fridays, Saturdays, Sundays and the Chinese mainland’s statutory holidays for one hour per day from 8:00 p.m. to 9:00 p.m.
Investment Company Act of 1940, as amended (“the Investment Company Act”), defines “investment company,” in relevant part, as an issuer which “(A) [i]s or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities . . . or (C) [i]s engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis.” For the reasons noted below, we believe that we are not an investment company under either Section 3(a)(1)(A) or Section 3(a)(1)(C), because (i) we are not now engaged, do not propose to engage, and have never since our founding in 1996 been engaged, either primarily or at all, in the business of “investing, reinvesting, or trading in securities” and (ii) based on our position noted below as to the proper application to our various assets of the definition of “investment securities,” we do not hold or propose to acquire investment securities having a value exceeding 40% of the value of our total assets, exclusive of Government securities and cash items, on an unconsolidated basis.
Investment Company Act of 1940, as amended (the “Investment Company Act”), defines “investment company,” in relevant part, as an issuer which “(A) [i]s or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities . . . or (C) [i]s engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis.” For the reasons noted below, we believe that we are not an investment company under either Section 3(a)(1)(A) or Section 3(a)(1)(C), because (i) we are not now engaged, do not propose to engage, and have never since our founding in 1996 been engaged, either primarily or at all, in the business of “investing, reinvesting, or trading in securities” and (ii) based on our position noted below as to the proper application to our various assets of the definition of “investment securities,” we do not hold or propose to acquire investment securities having a value exceeding 40% of the value of our total assets, exclusive of Government securities and cash items, on an unconsolidated basis.
Additional risks associated with the licensing or direct or joint operation of Changyou’s games overseas include: • difficulties and significant costs in protecting Changyou’s intellectual property in overseas markets; • difficulties in retaining and maintaining local management and key development and technical personnel who are experienced and knowledgeable about, and can effectively operate Changyou’s games in, particular markets; • uncertainties relating to Changyou’s ability to develop its games and/or expansion packs catering to particular overseas markets; • uncertainties relating to Changyou’s ability to renew its license and joint operation agreements with licensees and joint operators upon their expiration; • for Changyou’s direct operation of its games overseas, interruptions in the operation of the games due to cross-border Internet connection or other system failures; • significant costs for translation of its games into the local languages of, or customization of its games for, the overseas markets in which Changyou plans to license or jointly operate its games; • limited choices of third-party Internet platforms to distribute Changyou’s mobile games in certain overseas markets; • difficulty for Changyou’s management to exercise timely and effective supervision and administration of local management and employees in general, and their interactions with local third-party Internet platforms or other service providers in particular, in order to identify and prevent any sloppy, dishonest or illegal activities, which could harm Changyou’s business and reputation or subject Changyou to penalties; • significant marketing costs to promote Changyou’s games in certain overseas markets where third-party Internet platforms do not include marketing services as part of the revenue-sharing arrangements; • different game player preferences in certain overseas markets; • difficulties and significant costs relating to compliance with the different legal requirements and commercial terms, such as game export regulatory procedures, taxes and other restrictions and expenses, in the overseas markets in which Changyou licenses or directly or jointly operates its games; • exposure to different regulatory systems governing the protection of intellectual property and the regulation of online games, the Internet and the export of technology; • costs for compliance with different legal requirements and commercial terms in overseas markets; • difficulties in verifying revenues generated from Changyou’s games by its licensees for purposes of determining royalties payable to Changyou; • difficulties and delays in contract enforcement and collection of receivables through the use of foreign legal systems; • changes in the political, regulatory or economic conditions, or public policy, affecting online games in particular foreign countries or regions; 58 Table of Contents • the risk that regulatory authorities in foreign countries or administrative regions may impose withholding taxes, or place restrictions on repatriation of Changyou’s profits; and • fluctuations in currency exchange rates.
Additional risks associated with the licensing or direct or joint operation of Changyou’s games overseas include: • difficulties and significant costs in protecting Changyou’s intellectual property in overseas markets; • difficulties in retaining and maintaining local management and key development and technical personnel who are experienced and knowledgeable about, and can effectively operate Changyou’s games in, particular markets; • uncertainties relating to Changyou’s ability to develop its games and/or expansion packs catering to particular overseas markets; • uncertainties relating to Changyou’s ability to renew its license and joint operation agreements with licensees and joint operators upon their expiration; • for Changyou’s direct operation of its games overseas, interruptions in the operation of the games due to cross-border Internet connection or other system failures; • significant costs for translation of its games into the local languages of, or customization of its games for, the overseas markets in which Changyou plans to license or jointly operate its games; • limited choices of third-party Internet platforms to distribute Changyou’s mobile games in certain overseas markets; • difficulty for Changyou’s management to exercise timely and effective supervision and administration of local management and employees in general, and their interactions with local third-party Internet platforms or other service providers in particular, in order to identify and prevent any sloppy, dishonest or illegal activities, which could harm Changyou’s business and reputation or subject Changyou to penalties; 57 Table of Contents • significant marketing costs to promote Changyou’s games in certain overseas markets where third-party Internet platforms do not include marketing services as part of the revenue-sharing arrangements; • different game player preferences in certain overseas markets; • difficulties and significant costs relating to compliance with the different legal requirements and commercial terms, such as game export regulatory procedures, taxes and other restrictions and expenses, in the overseas markets in which Changyou licenses or directly or jointly operates its games; • exposure to different regulatory systems governing the protection of intellectual property and the regulation of online games, the Internet and the export of technology; • costs for compliance with different legal requirements and commercial terms in overseas markets; • difficulties in verifying revenues generated from Changyou’s games by its licensees for purposes of determining royalties payable to Changyou; • difficulties and delays in contract enforcement and collection of receivables through the use of foreign legal systems; • changes in the political, regulatory or economic conditions, or public policy, affecting online games in particular foreign countries or regions; • the risk that regulatory authorities in foreign countries or administrative regions may impose withholding taxes, or place restrictions on repatriation of Changyou’s profits; and • fluctuations in currency exchange rates.
GAAP (ASC 810)) as would ownership of these businesses; and the contracts may be difficult to enforce” and “- A failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them could have an adverse effect on our business and financial condition.” 3 Table of Contents The table below presents our condensed consolidating schedule of financial position for our top-tier publicly-traded holding company Sohu.com Limited (the “Company”), our wholly-owned subsidiaries that are the primary beneficiaries of the VIEs under U.S.
GAAP (ASC 810)) as would ownership of these businesses; and the contracts may be difficult to enforce” and “- A failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them could have an adverse effect on our business and financial condition.” 3 Table of Contents The table below presents our condensed consolidating schedule of financial position for our top-tier publicly-traded holding company Sohu.com Limited, our wholly-owned subsidiaries that are the primary beneficiaries of the VIEs under U.S.
Further, (i) as is evidenced by our periodic filings, press releases, and earnings release conference calls, we have never held ourselves out as, and do not propose to be, primarily engaged in, “the business of investing, reinvesting, or trading in securities”; (ii) our management is focused almost exclusively on the performance and growth of the businesses of our operating subsidiaries, and only occasionally focuses on investment assets, and when our management occasionally does so it is only in order to ensure that the investments are managed in a way that will safely preserve our capital for deployment in those businesses or, from time to time, for repurchase of our ADSs in the open market; (iii) as noted, those assets are invested prudently, with the goal of preserving them for future use in operations; there is no goal of generating any significant return for shareholders through those investments, nor is there, nor has there been, any communication from us to our shareholders suggesting that there is such a goal; and (iv) although we have frequently in recent years experienced a net loss after taxes from our overall operating business, and our investments, including our investment securities, have almost always generated net income, the net losses we have experienced have been small compared to our total operating revenues; operating losses from our Sohu segment have been offset significantly by operating income from our Changyou segment; and the income from our investments, which is close to total revenues from those investments, has been small in comparison to our total revenues and the income generated by our Changyou segment.
Further, (i) as is evidenced by our periodic filings, press releases, and earnings release conference calls, we have never held ourselves out as, and do not propose to be, primarily engaged in, “the business of investing, reinvesting, or trading in securities;” (ii) our management is focused almost exclusively on the performance and growth of the businesses of our operating subsidiaries, and only occasionally focuses on investment assets, and when our management occasionally does so it is only in order to ensure that the investments are managed in a way that will safely preserve our capital for deployment in those businesses or, from time to time, for repurchase of our ADSs in the open market; (iii) as noted, those assets are invested prudently, with the goal of preserving them for future use in operations; there is no goal of generating any significant return for shareholders through those investments, nor is there, nor has there been, any communication from us to our shareholders suggesting that there is such a goal; and (iv) although we have frequently in recent years experienced a net loss after taxes from our overall operating business, and our investments, including our investment securities, have almost always generated net income, the net losses we have experienced have been small compared to our total operating revenues; operating losses from our Sohu segment have been offset significantly by operating income from our Changyou segment; and the income from our investments, which is close to total revenues from those investments, has been small in comparison to our total revenues and the income generated by our Changyou segment.
In addition, Sohu’s online video businesses are operated under various Internet platforms, such as sohu.com, and focus.cn, but current laws and regulations of the Chinese mainland are lack of clear provisions indicating whether it is permissible to provide video services over several Internet platforms that are owned by a single company under one permit and the NRTA might claim that such operation under one permit is not allowed under the Provisions on the Administration of Private Network and Targeted Communication Audiovisual Program Services .
In addition, Sohu’s businesses are operated under various Internet platforms, such as sohu.com, and focus.cn, but current laws and regulations of the Chinese mainland are lack of clear provisions indicating whether it is permissible to provide video services over several Internet platforms that are owned by a single company under one permit and the NRTA might claim that such operation under one permit is not allowed under the Provisions on the Administration of Private Network and Targeted Communication Audiovisual Program Services .
See “ - As our products and services are currently accessed primarily through mobile phones, tablets and other internet-enabled mobile devices, we believe that we must develop products and applications for such devices if we are to maintain or increase our market share and revenues, and we may not be successful in doing so.” If we fail to establish and maintain relationships with content, technology and infrastructure providers, we may not be able to attract and retain users.
See “ - As our products and services are currently accessed primarily through mobile phones, tablets, wearable devices and other internet-enabled mobile devices, we believe that we must develop products and applications for such devices if we are to maintain or increase our market share and revenues, and we may not be successful in doing so.” If we fail to establish and maintain relationships with content, technology and infrastructure providers, we may not be able to attract and retain users.
If regulatory authorities in the Chinese mainland believe that illegal or inappropriate activities haven been conducted through our live broadcasting platform, or if there is negative media coverage concerning our platform, the authorities in the Chinese mainland may hold us liable for non-compliance and subject us to administrative penalties or other sanctions, which could cause our business to suffer or have an adverse effect on our user base.
If regulatory authorities in the Chinese mainland believe that illegal or inappropriate activities haven been conducted through our live broadcasting platform, or if there is negative media coverage concerning our platforms, the authorities in the Chinese mainland may hold us liable for non-compliance and subject us to administrative penalties or other sanctions, which could cause our business to suffer or have an adverse effect on our user base.
For a detailed discussion of Chinese mainland regulations with respect to wholly foreign owned subsidiaries that are incorporated in the Chinese mainland (“WFOEs”) and any subsidiaries that, although not wholly foreign owned, are considered to be foreign owned, see “Governmental Regulation and Legal Uncertainties - Specific Statues and Regulations - Requirements for Establishment of WFOEs.” If we were found to be in violation of any existing or future Chinese mainland law or regulations relating to foreign ownership of value-added telecommunication services, Internet publishing, online news information services, online audiovisual transmission, online games, and certain other businesses where foreign investment is prohibited or restricted in the Chinese mainland or is subject to security review under Chinese mainland law, regulatory authorities with jurisdiction over the operation of our business would have broad discretion in dealing with such a violation, including levying fines, confiscating our income, revoking the business or operating licenses of our Chinese mainland subsidiaries and/or the VIEs we consolidate under U.S.
For a detailed discussion of Chinese mainland regulations with respect to wholly foreign owned subsidiaries that are incorporated in the Chinese mainland (“WFOEs”) and any subsidiaries that, although not wholly foreign owned, are considered to be foreign owned, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Requirements for Establishment of WFOEs.” If we were found to be in violation of any existing or future Chinese mainland law or regulations relating to foreign ownership of value-added telecommunication services, Internet publishing, online news information services, online audiovisual transmission, online games, and certain other businesses where foreign investment is prohibited or restricted in the Chinese mainland or is subject to security review under Chinese mainland law, regulatory authorities with jurisdiction over the operation of our business would have broad discretion in dealing with such a violation, including levying fines, confiscating our income, revoking the business or operating licenses of our Chinese mainland subsidiaries and/or the VIEs we consolidate under U.S.
Under the Implementing Regulations for the Corporate Income Tax Law , Chinese mainland income tax at the rate of 10% is applicable to dividends payable to investors that are “non-resident enterprises,” not having an establishment or place of business in the Chinese mainland, or which do have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent that such dividends have their sources within the Chinese mainland.
Under the Implementing Regulations for the Corporate Income Tax Law , Chinese mainland income tax at the rate of 10% is applicable to dividends payable to investors that are “non-resident enterprises,” not having an establishment or place of business in the Chinese mainland, or which do have such establishment or place of business but whose relevant income is not effectively connected with the establishment or place of business, to the extent that such dividends have their sources within the Chinese mainland.
We do not expect that the regulatory requirements under the anti-monopoly laws and regulations of the Chinese mainland will have a material impact on our business and results of operations, and as of the date of this annual report, we have not been subject to any penalties or other administrative actions in connection with any anti-monopoly violation.
We do not expect that the regulatory requirements under the anti-monopoly laws and regulations of the Chinese mainland will have a material impact on our business and results of operations, and as of the date of the filing of this annual report, we have not been subject to any penalties or other administrative actions in connection with any anti-monopoly violation.
Although we have implemented procedures for our live broadcasting platform designed to detect and prevent material and activity that we believe could reasonably be considered to be prohibited, it is possible that hosts and users of our platform may distribute content and engage in activities that may be deemed illegal, but that we do not detect and identify as such.
Although we have implemented procedures for our live broadcasting platform designed to detect and prevent material and activity that we believe could reasonably be considered to be prohibited, it is possible that hosts and users of our platforms may distribute content and engage in activities that may be deemed illegal, but that we do not detect and identify as such.
Our operations might not be consistent with current laws and regulations or any such new regulations and, as a result, we could be subject to penalties. Regulation and censorship of information distribution in the Chinese mainland may adversely affect our business. Authorities in the Chinese mainland have enacted regulations governing Internet access and the distribution of news and other information.
Our operations might not be consistent with current laws and regulations or any such new regulations and, as a result, we could be subject to penalties. Regulation of the distribution of information in the Chinese mainland may adversely affect our business. Authorities in the Chinese mainland have enacted regulations governing Internet access and the distribution of news and other information.
As our products and services are currently accessed primarily through mobile phones, tablets and other internet-enabled mobile devices, we believe that we must develop products and applications for such devices if we are to maintain or increase our market share and revenues, and we may not be successful in doing so.
As our products and services are currently accessed primarily through mobile phones, tablets, wearable devices and other internet-enabled mobile devices, we believe that we must develop products and applications for such devices if we are to maintain or increase our market share and revenues, and we may not be successful in doing so.
If we are not able to continue to attract users or other content providers to establish quality content on our Internet platforms, or if the UGC and PGC providers on our Internet platform are not able to provide quality content that is appealing to Internet users in general, the volume of our user traffic may decrease and our business and prospects may be adversely affected.
If we are not able to continue to attract users or other content providers to establish quality content on our Internet platforms, or if the UGC and PGC providers on our Internet platforms are not able to provide quality content that is appealing to Internet users in general, the volume of our user traffic may decrease and our business and prospects may be adversely affected.
See “Governmental Regulation and Legal Uncertainties – Miscellaneous – Laws and Regulations Related to Security and Censorship.” 19 Table of Contents Any failure, or perceived failure, by us, or by our partners, to maintain the security of our user data or to comply with applicable Chinese mainland or Offshore privacy, data security and personal information protection laws, regulations, policies, contractual provisions, industry standards and other requirements may result in civil or regulatory liability, including regulatory or data protection authority enforcement actions and investigations, fines, penalties, enforcement orders requiring us to cease operating in a certain way, litigation or adverse publicity, and may require us to expend significant resources in responding to and defending allegations and claims against us.
See “Governmental Regulation and Legal Uncertainties – Specific Statutes and Regulations – Miscellaneous – Laws and Regulations Related to Security and Censorship.” 19 Table of Contents Any failure, or perceived failure, by us, or by our partners, to maintain the security of our user data or to comply with applicable Chinese mainland or Offshore privacy, data security and personal information protection laws, regulations, policies, contractual provisions, industry standards and other requirements may result in civil or regulatory liability, including regulatory or data protection authority enforcement actions and investigations, fines, penalties, enforcement orders requiring us to cease operating in a certain way, litigation or adverse publicity, and may require us to expend significant resources in responding to and defending allegations and claims against us.
We may be required to record a significant charge to earnings when we reassess our goodwill or amortizable intangible assets. We are required under U.S. GAAP to test for goodwill impairment annually or when an event occurs or circumstances change in a manner that could indicate that the goodwill might be impaired.
We may be required to record a significant charge to earnings when we reassess our goodwill or intangible assets. We are required under U.S. GAAP to test for goodwill impairment annually or when an event occurs or circumstances change in a manner that could indicate that the goodwill might be impaired.
As of the date of this annual report, the validity and enforceability of the types of contracts that we have with the VIEs and/or their shareholders, or, to our knowledge, of similar contracts used by other Chinese mainland-based companies, have never been considered or determined by a court in the Chinese mainland.
As of the date of the filing of this annual report, the validity and enforceability of the types of contracts that we have with the VIEs and/or their shareholders, or, to our knowledge, of similar contracts used by other Chinese mainland-based companies, have never been considered or determined by a court in the Chinese mainland.
However, we may grant or sell additional options, restricted shares or other share-based awards in the future under our share incentive plan to members of our management, our employees and other persons, the settlement and sale of which would dilute our outstanding shares, which could drive down the price of our ADSs.
We may grant or sell additional options, restricted shares or other share-based awards in the future under our share incentive plan to members of our management, our employees and other persons, the settlement and sale of which would dilute our outstanding shares, which could drive down the price of our ADSs.
The need to comply with such requirements could prevent us from making timely fund transfers to our Chinese mainland subsidiaries and, in the event we wish to make such transfers through loans to our Chinese mainland subsidiaries or the VIEs, will limit the amounts that we may transfer, which could limit our ability to fund or expand our business. 37 Table of Contents SAFE promulgated the Circular on Reforming Management of the Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises (“Circular 19”), which became effective on June 1, 2015, and the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (“Circular 16”), which took effect on June 9, 2016.
The need to comply with such requirements could prevent us from making timely fund transfers to our Chinese mainland subsidiaries and, in the event we wish to make such transfers through loans to our Chinese mainland subsidiaries or the VIEs, will limit the amounts that we may transfer, which could limit our ability to fund or expand our business. 38 Table of Contents SAFE promulgated the Circular on Reforming Management of the Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises (“Circular 19”), which became effective on June 1, 2015, and the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (“Circular 16”), which took effect on June 9, 2016.
Accordingly, we cannot assure that these contracts are valid and enforceable in the Chinese mainland. In the event we were unable to enforce these contractual arrangements, we would no longer have a controlling financial interest (as defined under U.S.
Accordingly, we cannot assure you that these contracts are valid and enforceable in the Chinese mainland. In the event we were unable to enforce these contractual arrangements, we would no longer have a controlling financial interest (as defined under U.S.
If we were to be so identified in the future and continued as such for a period of two consecutive years, the SEC would be required by the HFCAA to prohibit trading of our ADSs and ordinary shares on Nasdaq, any other U.S. securities exchange, and in the over-the-counter market, which would substantially reduce or effectively terminate the trading of our ADSs in the United States, which could cause our ADSs to lose all of their market value. 40 Table of Contents In addition, the HFCAA could cause uncertainty among investors and potential investors in our ADSs, and lead them to lose confidence in our ADSs as an investment.
If we were to be so identified in the future and continued as such for a period of two consecutive years, the SEC would be required by the HFCAA to prohibit trading of our ADSs and ordinary shares on Nasdaq, any other U.S. securities exchange, and in the over-the-counter market, which would substantially reduce or effectively terminate the trading of our ADSs in the United States, which could cause our ADSs to lose all of their market value. 41 Table of Contents In addition, the HFCAA could cause uncertainty among investors and potential investors in our ADSs, and lead them to lose confidence in our ADSs as an investment.
In addition, if we are accused by any regulatory authority of hosting vulgar content, our reputation could be adversely affected. Regulations relating to the online transmission of foreign films and TV dramas may adversely affect our online video business.
In addition, if we are accused by any regulatory authority of hosting vulgar content, our reputation could be adversely affected. Regulations relating to the online transmission of foreign films and TV dramas may adversely affect our business.
If we are not able to obtain the required SAPPRFT approval in time, there will be a delay in our ability to broadcast such foreign films and TV dramas on our Internet platforms and in our generation of advertising revenues from such films and TV dramas.
If we are not able to obtain the required SAPPRFT approval in time, there will be a delay in our ability to broadcast such foreign films and TV dramas on our Internet platforms and in our generation of revenues from such films and TV dramas.
It is unclear whether dividends we pay with respect to our share, or the profits you may realize from the transfer of our shares, would be treated as income derived from sources within the Chinese mainland and be subject to Chinese mainland tax.
It is unclear whether dividends we pay with respect to our shares, or the profits you may realize from the transfer of our shares, would be treated as income derived from sources within the Chinese mainland and be subject to Chinese mainland tax.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Online Games Services - Online Games and Cultural Products.” Current Chinese mainland regulations are not clear as to the consequence of obtaining authorization codes through the licenses of third-party entities.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Online Game Services - Online Games and Cultural Products.” Current Chinese mainland regulations are not clear as to the consequence of obtaining authorization codes through the licenses of third-party entities.
Factors that may be considered a change in circumstances indicating that the carrying value of our amortizable intangible assets may not be recoverable include a decline in stock price and market capitalization and slower or declining growth rates in our industry.
Factors that may be considered a change in circumstances indicating that the carrying value of our intangible assets may not be recoverable include a decline in stock price and market capitalization and slower or declining growth rates in our industry.
Although we require all users upon account registration to agree to our terms of service, which specify the types of content that are prohibited on our platform, and we have deleted from our relevant channels and communities all Web pages with material that we believe could reasonably be considered to be vulgar and have strengthened our internal censorship and supervision of links and content uploaded by users, it is possible that our users may engage in obscene conversations or activities on our platform that may be deemed illegal under laws and regulations of the Chinese mainland.
Although we require all users upon account registration to agree to our terms of service, which specify the types of content that are prohibited on our platforms, and we have deleted from our relevant channels and communities all Web pages with material that we believe could reasonably be considered to be vulgar and have strengthened our internal censorship and supervision of links and content uploaded by users, it is possible that our users may engage in obscene conversations or activities on our platforms that may be deemed illegal under laws and regulations of the Chinese mainland.
See “Risks Related to Our Business - We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and, if determined adversely to us, materially disrupt our business.” While we have implemented internal procedures to review videos uploaded by our users and remove promptly from our Internet platforms any infringing videos after we receive infringement notifications from rights owners, due to the significant number of videos uploaded by users, we may not be able to identify all content that may infringe on third-party rights.
See “- We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and, if determined adversely to us, materially disrupt our business.” While we have implemented internal procedures to review videos uploaded by our users and remove promptly from our Internet platforms any infringing videos after we receive infringement notifications from rights owners, due to the significant number of videos uploaded by users, we may not be able to identify all content that may infringe on third-party rights.
Many of Changyou’s competitors have, or may over time be able to gain, competitive advantages over Changyou in terms of: • greater financial and technical resources; • more aggressive and effective strategies for hiring talent for game development, which may make it difficult for Changyou to retain its existing employees and attract new employees, which are necessary for Changyou to be able to grow its business; • substantially greater financial resources and more effective methods for acquiring exclusive license rights to the titles, characters, themes and story lines of popular works in order to adapt online games from such works (which has become increasingly important for new online games to be successful); • more aggressive and effective marketing strategies for promoting their online games and penetrating the mobile game market; and • more capability for developing and releasing new software for mobile devices to attract a growing number of game players that access Internet products and services through mobile devices.
Many of Changyou’s competitors have, or may over time be able to gain, competitive advantages over Changyou in terms of: • greater financial and technical resources; 47 Table of Contents • more aggressive and effective strategies for hiring talent for game development, which may make it difficult for Changyou to retain its existing employees and attract new employees, which are necessary for Changyou to be able to grow its business; • substantially greater financial resources and more effective methods for acquiring exclusive license rights to the titles, characters, themes and story lines of popular works in order to adapt online games from such works (which has become increasingly important for new online games to be successful); • more aggressive and effective marketing strategies for promoting their online games and penetrating the mobile game market; and • more capability for developing and releasing new software for mobile devices to attract a growing number of game players that access Internet products and services through mobile devices.
Changyou’s future operating results will depend on numerous factors affecting the online game industry, many of which are beyond Changyou’s control, including: • whether the online game industry, particularly in the Chinese mainland and the rest of the Asia-Pacific region, continues to grow and the rate of any such growth; • the availability and popularity of other forms of entertainment, particularly games on console systems, which are already popular in developed countries and may gain popularity in the Chinese mainland; • growth in users of the Internet and broadband and penetration in the Chinese mainland and other markets in which Changyou offers its games, and the rate of any such growth; • whether recent declines in the use of personal computers and growth in users of mobile devices such as smart phones and tablets in general, and for purposes of accessing online games in particular, continue or accelerate in the Chinese mainland and other markets in which Changyou offers its games; • changes in consumer demographics and public tastes and preferences; and • general economic conditions in the Chinese mainland, particularly economic conditions adversely affecting discretionary consumer spending.
Changyou’s future operating results will depend on numerous factors affecting the online game industry, many of which are beyond Changyou’s control, including: • whether the online game industry, particularly in the Chinese mainland and the rest of the Asia-Pacific region, continues to grow and the rate of any such growth; • the availability and popularity of other forms of entertainment, particularly games on console systems, which are already popular in developed countries and may gain popularity in the Chinese mainland; 50 Table of Contents • growth in users of the Internet and broadband and penetration in the Chinese mainland and other markets in which Changyou offers its games, and the rate of any such growth; • whether recent declines in the use of personal computers and growth in users of mobile devices such as smart phones and tablets in general, and for purposes of accessing online games in particular, continue or accelerate in the Chinese mainland and other markets in which Changyou offers its games; • changes in consumer demographics and public tastes and preferences; and • general economic conditions in the Chinese mainland, particularly economic conditions adversely affecting discretionary consumer spending.
As a result, it is unclear under laws and regulations of the Chinese mainland as in effect as of the date of this annual report who the legal owner of virtual assets is and whether the ownership of virtual assets is protected by law.
As a result, it is unclear under laws and regulations of the Chinese mainland as in effect as of the date of the filing of this annual report who the legal owner of virtual assets is and whether the ownership of virtual assets is protected by law.
GAAP (ASC 810) that have qualified as HNTEs or Software Enterprises, cannot qualify for such preferential income tax status in the future, our effective income tax rate will be increased significantly and we may have to pay additional income tax to make up the previously unpaid tax, which would reduce our net income. 38 Table of Contents We may be deemed a Chinese mainland resident enterprise and be subject to Chinese mainland taxation on our worldwide income.
GAAP (ASC 810) that have qualified as HNTEs or Software Enterprises, cannot qualify for such preferential income tax status in the future, our effective income tax rate will be increased significantly and we may have to pay additional income tax to make up the previously unpaid tax, which would reduce our net income. 39 Table of Contents We may be deemed a Chinese mainland resident enterprise and be subject to Chinese mainland taxation on our worldwide income.
The Notice on Preventing Minors From Indulging in Online Games (the “Indulgence Prevention Notice”), which the SAPPRFT issued on October 25, 2019 and became effective on November 1, 2019, requires online game operators to implement measures to not give minors access to online game services during specified periods of the day, imposes daily limits on minors’ length of use and spending for paid online game services, and prohibits online game operators from providing paid game services to minors under the age of eight.
The Notice on Preventing M inors From Indulging in Online Games (the “Indulgence Prevention Notice”), which the SAPPRFT issued on October 25, 2019 and became effective on November 1, 2019, requires online game operators to implement measures to not give minors access to online game services during specified periods of the day, imposes daily limits on minors’ length of use and spending for paid online game services, and prohibits online game operators from providing paid game services to minors under the age of eight.
Both the Grand Court of the Cayman Islands, a court of first instance, and the Cayman Islands Court of Appeal ruled in the plaintiffs’ favor, and Changyou has appealed to the Judicial Committee of the Privy Council in the United Kingdom (the highest court of appeal).
Both the Grand Court of the Cayman Islands, a court of first instance, and the Cayman Islands Court of Appeal ruled in the plaintiffs’ favor, and Changyou appealed to the Judicial Committee of the Privy Council in the United Kingdom (the highest court of appeal).
On December 15, 2022, the PCAOB reported to the SEC (the “2022 PCAOB Determination”) that, after conducting extensive and thorough inspections and investigations under the PCAOB/China Audit Agreement, the PCAOB had determined that it had been able to conduct inspections and investigations to its satisfaction and that those registered public accounting firms headquartered in the Chinese mainland and in Hong Kong, including our registered public accounting firm, that were previously subject to the 2021 PCAOB Determination were no longer identified as PCAOB-Identified Firms.
On December 15, 2022, the PCAOB reported to the SEC that, after conducting extensive and thorough inspections and investigations under the PCAOB/China Audit Agreement, the PCAOB had determined that it had been able to conduct inspections and investigations to its satisfaction and that those registered public accounting firms headquartered in the Chinese mainland and in Hong Kong, including our registered public accounting firm, that were previously subject to the 2021 PCAOB Determination were no longer identified as PCAOB-Identified Firms.
We are also required to review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
We are also required to review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
Furthermore, any interruptions in TLBB PC and Legacy TLBB Mobile’s operations could cause significant decreases in our revenues, net income, and operating cash flow. 12 Table of Contents We face intense competition, which could reduce our market share and adversely affect our financial performance. There are many companies that distribute online content and services targeting Chinese Internet users.
Furthermore, any interruptions in TLBB PC’s and Legacy TLBB Mobile’s operations could cause significant decreases in our revenues, net income, and operating cash flow. 12 Table of Contents We face intense competition, which could reduce our market share and adversely affect our financial performance. There are many companies that distribute online content and services targeting Chinese Internet users.
Our business has been and could in the future be adversely affected by natural disasters, such as earthquakes, floods, landslides, and tsunamis; terrorist attacks and other acts of violence or war; social instability; and recurrences of outbreaks of previous health epidemics and pandemics such as avian influenza, severe acute respiratory syndrome (or “SARS”), the Zika virus, the Ebola virus, and COVID-19.
Our business has been and could in the future be adversely affected by natural disasters, such as earthquakes, floods, landslides, and tsunamis; terrorist attacks and other acts of violence or war; social instability; and recurrences of outbreaks of previous health epidemics and pandemics such as avian influenza, severe acute respiratory syndrome (or SARS), the Zika virus, the Ebola virus, and COVID-19.
In addition, we may not publish certain news items, such as news that compromises national security, without permission from regulatory authorities in the Chinese mainland. Furthermore, the Ministry of Public Security (the “MPS”) has the authority to make any local Internet service provider block any Website maintained outside the Chinese mainland at its sole discretion.
In addition, we may not be able to publish certain news items, such as news that compromises national security, without permission from regulatory authorities in the Chinese mainland. Furthermore, the Ministry of Public Security (the “MPS”) has the authority to make any local Internet service provider block any website maintained outside the Chinese mainland at its sole discretion.
Also see “We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and, if determined adversely to us, materially disrupt our business.” 16 Table of Contents Our business also depends significantly on relationships with leading technology and infrastructure providers and the licenses that the technology providers have granted to us.
Also see “- We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and, if determined adversely to us, materially disrupt our business.” 16 Table of Contents Our business also depends significantly on relationships with leading technology and infrastructure providers and the licenses that the technology providers have granted to us.
We are also subject to the risk that users might access pirated versions of such films and TV dramas during any such delay, and become less likely to view them on our Internet platforms when they become available, which would cause our online traffic and advertising revenues to be lower than we expected.
We are also subject to the risk that users might access pirated versions of such films and TV dramas during any such delay, and become less likely to view them on our Internet platforms when they become available, which would cause our online traffic and corresponding revenues to be lower than we expected.
For a discussion of these Chinese mainland national security review requirements, see “Governmental Regulation and Legal Uncertainties - Specific Statues and Regulations - Miscellaneous - Regulation of M&A and Overseas Listings.” The Law of the People’s Republic of China on Foreign Investment (the “Foreign Investment Law”) currently does not explicitly categorize contractual arrangements as a form of foreign investment.
For a discussion of these Chinese mainland national security review requirements, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Miscellaneous - Regulation of M&A and Overseas Listings.” The Law of the People’s Republic of China on Foreign Investment (the “Foreign Investment Law”) currently does not explicitly categorize contractual arrangements as a form of foreign investment.
If we fail to promote our brands successfully or if our users or advertisers do not perceive our content and services to be of high-quality, we may not be able to continue growing our business and attracting users, advertisers, online game players and mobile users. Our failure to keep up with rapid technology changes may severely affect our future success.
If we fail to promote our brands successfully or if our users or advertisers do not perceive our content and services to be of high quality, we may not be able to continue growing our business and attracting users, customers, and online game players. Our failure to keep up with rapid technology changes may severely affect our future success.
We may be subject to fines or other disciplinary actions, including in serious cases suspension or revocation of the licenses necessary to operate our platform, if we are deemed under the laws and regulations of the Chinese mainland to have facilitated the appearance of inappropriate content placed by third parties on our platform.
We may be subject to fines or other disciplinary actions, including in serious cases suspension or revocation of the licenses necessary to operate our platforms, if we are deemed under the laws and regulations of the Chinese mainland to have facilitated the appearance of inappropriate content placed by third parties on our platforms.
If any of Changyou’s online game operating entities are unable to comply with the requirements of any regulatory authority in the Chinese mainland regarding the online game industry, it may be subject to various penalties and its online game business may be adversely affected. 62 Table of Contents Laws and regulations of the Chinese mainland governing the online game industry are evolving and subject to future changes.
If any of Changyou’s online game operating entities are unable to comply with the requirements of any regulatory authority in the Chinese mainland regarding the online game industry, it may be subject to various penalties and its online game business may be adversely affected. 61 Table of Contents Laws and regulations of the Chinese mainland governing the online game industry are evolving and subject to future changes.
However, the Foreign Investment Law provides that foreign investment includes “foreign investors’ investment in the Chinese mainland through any other methods specified by laws, administrative regulations, or provisions prescribed by the State Council” without elaboration on the meaning of “other methods”. The Implementing Regulations of the Foreign Investment Law are also silent on whether foreign investment includes contractual arrangements.
However, the Foreign Investment Law provides that foreign investment includes “foreign investors’ investment in the Chinese mainland through any other methods specified by laws, administrative regulations, or provisions prescribed by the State Council” without elaboration on the meaning of “other methods.” The Implementing Regulations of the Foreign Investment Law are also silent on whether foreign investment includes contractual arrangements.
Since there is usually a delay between the time of a game player’s purchase and the time when the store pays Changyou, if the foreign currency used has depreciated against the RMB during the delay Changyou will receive lower share-sharing amounts at the time of the payment than Changyou would have received if the payment had been made at the time of the game player’s purchase.
Since there is usually a delay between the time of a game player’s purchase and the time when the store pays Changyou, if the foreign currency used has depreciated against the RMB during the delay Changyou will receive lower amounts at the time of the payment than Changyou would have received if the payment had been made at the time of the game player’s purchase.
Furthermore, regulatory authorities in the Chinese mainland have recently been drawing attention to issues regarding the infringement of online intellectual property rights. For example, a regulatory program called the “Jian Wang Campaign” aimed at cracking down on network copyright infringement, has been in effect for several years.
Furthermore, regulatory authorities in the Chinese mainland have regularly been drawing attention to issues regarding the infringement of online intellectual property rights. For example, a regulatory program called the “Jian Wang Campaign” aimed at cracking down on network copyright infringement, has been in effect for several years.
We are also subject to potential liabilities for content on our Internet platforms that is deemed inappropriate and for any unlawful actions of our subscribers and other users of our systems under regulations promulgated by the MIIT, such potential liabilities including the imposition of fines or even the shutting down of the Internet platforms.
We are also subject to potential liabilities for content on our Internet platforms that is deemed inappropriate and for any unlawful actions of our content providers and other users of our systems under regulations promulgated by the MIIT, such potential liabilities including the imposition of fines or even the shutting down of the Internet platforms.
We believe that we may have been classified as a passive foreign investment company (a “PFIC”), for our 2023 taxable year, which would likely result in adverse United States federal income tax consequences to U.S. holders of our ADSs or ordinary shares.
We believe that we may have been classified as a passive foreign investment company (a “PFIC”), for our 2024 taxable year, which would likely result in adverse United States federal income tax consequences to U.S. holders of our ADSs or ordinary shares.
See “Governmental Regulation and Legal Uncertainties – Miscellaneous – Laws and Regulations Related to Consumer Protection and Privacy Protection – Privacy Protection.” Complying with such requirements could cause us to incur substantial expenses or necessitate that we alter or change our practices in a manner that could harm our business.
See “Governmental Regulation and Legal Uncertainties – Specific Statutes and Regulations – Miscellaneous – Laws and Regulations Related to Consumer Protection and Privacy Protection – Privacy Protection.” Complying with such requirements could cause us to incur substantial expenses or necessitate that we alter or change our practices in a manner that could harm our business.
However, due to the uncertainties associated with the evolving legislative activities and varied local implementation practices of the competition laws and regulations of the Chinese mainland, the enhanced regulatory requirements may increase our compliance burden in our already highly-regulated industry. 31 Table of Contents In recent years, regulatory authorities in the Chinese mainland have enacted or published for public comment a series of laws and regulations related to cybersecurity and data security, such as the Internet Security Law of the People ’ s Republic of China (the “Internet Security Law”), which was enacted by the Standing Committee of the National People’s Congress on November 7, 2016 and became effective on June 1, 2017; the Data Security Law , which took effect on September 1, 2021; the Regulations on Security Protection of Critical Information Infrastructure (the “CII Regulations”), which were promulgated by the State Council on July 30, 2021 and became effective on September 1, 2021; the Draft Data Security Regulations , which were published for public comment on November 14, 2021; and the Measures for Cybersecurity Review , which were promulgated on December 28, 2021 and took effect on February 15, 2022 (the “Measures for Cybersecurity Review,” together with the Internet Security Law and the CII Regulations, the “Cybersecurity Laws”), while intensifying oversight and enforcement actions.
However, due to the uncertainties associated with the evolving legislative activities and varied local implementation practices of the competition laws and regulations of the Chinese mainland, the enhanced regulatory requirements may increase our compliance burden in our already highly-regulated industry. 31 Table of Contents In recent years, regulatory authorities in the Chinese mainland have enacted or published for public comment a series of laws and regulations related to cybersecurity and data security, such as the Internet Security Law of the People ’ s Republic of China (the “Internet Security Law”), which was enacted by the Standing Committee of the National People’s Congress on November 7, 2016 and became effective on June 1, 2017; the Data Security Law , which took effect on September 1, 2021; the Regulations on Security Protection of Critical Information Infrastructure (the “CII Regulations”), which were promulgated by the State Council on July 30, 2021 and became effective on September 1, 2021; the Data Security Regulations , which were promulgated by the State Council on September 24, 2024 and became effective on January 1, 2025; and the Measures for Cybersecurity Review , which were promulgated on December 28, 2021 and took effect on February 15, 2022 (the “Measures for Cybersecurity Review,” together with the Internet Security Law, the CII Regulations and the Data Security Regulations, the “Cybersecurity Laws”), while intensifying oversight and enforcement actions.
We believe that we may have been classified as a PFIC for United States federal income tax purposes for our taxable year ended November 30, 2023. There can be no assurance that we will not continue to be classified as a PFIC in the current taxable year or in any future taxable year.
We believe that we may have been classified as a PFIC for United States federal income tax purposes for our taxable year ended November 30, 2024. There can be no assurance that we will not continue to be classified as a PFIC in the current taxable year or in any future taxable year.
See “Governmental Regulation and Legal Uncertainties - Miscellaneous - Laws and Regulations Related to Security and Censorship.” The laws and regulations governing cybersecurity and data security in the Chinese mainland are relatively new and evolving rapidly, and the relevant regulatory authorities in the Chinese mainland have wide discretion in their interpretation and enforcement, which involve uncertainties.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Miscellaneous - Laws and Regulations Related to Security and Censorship.” The laws and regulations governing cybersecurity and data security in the Chinese mainland are relatively new and evolving rapidly, and the relevant regulatory authorities in the Chinese mainland have wide discretion in their interpretation and enforcement, which involve uncertainties.
If, on the other hand, we respond to the minimum ratio requirement of the September 2014 SAPPRFT Notice by reducing our purchases of foreign films and TV dramas, our attraction to users, traffic or advertisers on our online video Internet platforms could be reduced, resulting in a decrease in our advertising revenues. 36 Table of Contents Regulation and censorship of live broadcasting services in the Chinese mainland may adversely affect our business.
If, on the other hand, we respond to the minimum ratio requirement of the September 2014 SAPPRFT Notice by reducing our purchases of foreign films and TV dramas, our attraction to users, traffic or advertisers on our online video Internet platforms could be reduced, resulting in a decrease in our revenues. 37 Table of Contents Regulation and censorship of live broadcasting services in the Chinese mainland may adversely affect our business.
The retention and management of personnel require significant time and resource commitments from us and our senior management. If we are unable to effectively manage a large and geographically dispersed group of employees or anticipate our future growth, our business could be adversely affected.
The retention and management of personnel require significant time and resource commitments from us and our senior management. If we are unable to effectively manage a large and geographically dispersed group of employees or anticipate our future development, our business could be adversely affected.
Further, we cannot be certain that content uploaded or shared by our users is legal and will not violate the privacy of others, and we may be unable to anticipate the existence of such content on our platform or to implement adequate preventative measures.
Further, we cannot be certain that content uploaded or shared by our users is legal and will not violate the privacy of others, and we may be unable to anticipate the existence of such content on our platforms or to implement adequate preventative measures.
The most severe punishment contemplated by the Real-name Registration Notice is termination of the operation of the online game if it is found to be in violation of the Anti-Fatigue Notice, the Real-name Registration Notice or the circular entitled Implementation of Online Game Monitor System of the Guardians of Minors (“the Monitor System Circular”).
The most severe punishment contemplated by the Real-name Registration Notice is termination of the operation of the online game if it is found to be in violation of the Anti-Fatigue Notice, the Real-name Registration Notice or the circular entitled Implementation of Online Game Monitor System of the Guardians of Minors (the “Monitor System Circular”).
Emerging start-ups may be able to innovate and provide new products, features and services faster than we can. Moreover, we cannot be sure that any of our new products, features and services will achieve widespread market acceptance or generate incremental revenue.
Emerging start-ups may be able to innovate and provide new products, features and services faster than we can. Moreover, we cannot be sure that any of our new products, features and services will achieve widespread market acceptance or generate incremental revenues.
See “Governmental Regulation and Legal Uncertainties – Miscellaneous – Laws and Regulations Related to Consumer Protection and Privacy Protection – Privacy Protection.” In addition, the Data Security Law, which took effect on September 1, 2021 (the “Data Security Law”), regulates data processing activities and security.
See “Governmental Regulation and Legal Uncertainties – Specific Statutes and Regulations – Miscellaneous – Laws and Regulations Related to Consumer Protection and Privacy Protection – Privacy Protection.” In addition, the Data Security Law , which took effect on September 1, 2021 (the “Data Security Law”), regulates data processing activities and security.
Although each of these members of Changyou’s management and key personnel has entered into an employment agreement with non-competition provisions, these non-competition provisions may not be enforceable in the Chinese mainland. 49 Table of Contents Changyou’s prospects for growth may be adversely affected if Changyou cannot successfully manage and make timely adjustments to its hiring needs to support its business strategies.
Although each of these members of Changyou’s management and key personnel has entered into an employment agreement with non-competition provisions, these non-competition provisions may not be enforceable in the Chinese mainland. Changyou’s prospects for growth may be adversely affected if Changyou cannot successfully manage and make timely adjustments to its hiring needs to support its business strategies.
Accordingly, any decrease in Changyou’s revenues from its PC games may have a relatively larger negative impact on its overall profits. As mobile devices such as tablets, mobile phones, and other devices other than personal computers are increasingly used to access online games, Changyou must continue to acquire or develop increasing numbers of mobile games that work on such devices.
Accordingly, any decrease in Changyou’s revenues from its PC games may have a relatively larger negative impact on Changyou’s overall profits. 51 Table of Contents As mobile devices such as tablets, mobile phones, and other devices other than personal computers are increasingly used to access online games, Changyou must continue to acquire or develop increasing numbers of mobile games that work on such devices.
Changyou faces significant risks associated with the licensing or joint operation of Changyou’s games, including: • difficulties in identifying appropriate markets; • difficulties in identifying, negotiating and maintaining good relationships with licensees or joint operators who are knowledgeable about, and can effectively operate Changyou’s games in, particular markets; 57 Table of Contents • difficulties in maintaining Changyou’s reputation and the reputation of its games when its games are operated by licensees or joint operators pursuant to their own standards; and • difficulties in protecting Changyou’s intellectual property.
Changyou faces significant risks associated with the licensing or joint operation of Changyou’s games, including: • difficulties in identifying appropriate markets; • difficulties in identifying, negotiating and maintaining good relationships with licensees or joint operators who are knowledgeable about, and can effectively operate Changyou’s games in, particular markets; • difficulties in maintaining Changyou’s reputation and the reputation of its games when its games are operated by licensees or joint operators pursuant to their own standards; and • difficulties in protecting Changyou’s intellectual property.
If Changyou’s data systems were damaged by system failure, network interruption, or virus infection, or attacked by a hacker, the integrity of data would be compromised, which could adversely affect its revenue recognition and the completeness and accuracy of its recognized revenues. Changyou regularly updates its existing virtual items and designs new virtual items and may also adjust prices.
If Changyou’s data systems were damaged by system failure, network interruption, or virus infection, or attacked by a hacker, the integrity of data would be compromised, which could adversely affect its revenue recognition and the completeness and accuracy of its recognized revenues. 55 Table of Contents Changyou regularly updates its existing virtual items and designs new virtual items and may also adjust prices.
If we or any of our subsidiaries are unable to receive the revenues from our operations through these service agreements and other arrangements, we may be unable to effectively fund any cash requirements we may have. Activities of Internet content providers are or will be subject to additional Chinese mainland regulations, which have not yet been put into effect.
If we or any of our subsidiaries are unable to receive the revenues from our operations through these service agreements and other arrangements, we may be unable to effectively fund any cash requirements we may have. 35 Table of Contents Activities of Internet content providers are or will be subject to additional Chinese mainland regulations, which have not yet been put into effect.
See “Changyou may not be successful in operating and improving its games to satisfy the changing demands of game players.” 51 Table of Contents To prolong TLBB PC and Legacy TLBB Mobile’s lifespans and slow the pace of their decline, Changyou needs to continually improve and update them on a timely basis with new features, including but not limited to enhanced social interaction features, that appeal to existing game players, attract new game players (including those who played earlier versions of TLBB PC and Legacy TLBB Mobile), and improve player stickiness to the games.
See “- Changyou may not be successful in operating and improving its games to satisfy the changing demands of game players.” To prolong TLBB PC and Legacy TLBB Mobile’s lifespans and slow the pace of their decline, Changyou needs to continually improve and update them on a timely basis with new features, including but not limited to enhanced social interaction features, that appeal to existing game players, attract new game players (including those who played earlier versions of TLBB PC and Legacy TLBB Mobile), and improve player stickiness to the games.
We have applied for initial registrations in the Chinese mainland and Offshore markets, and/or changes in registrations relating to transfers, of our key trademarks in the Chinese mainland, including Sohu.com, Sohu Fox, www.focus.com.cn, Sohu Focus, GoodFeel, trademarks relating to Changyou products such as ChangYou.com, cyou.com, New Blade Online, 17173, and the corresponding Chinese versions of the marks, so as to establish and protect our exclusive rights to these trademarks.
We have applied for initial registrations in the Chinese mainland and Offshore markets, and/or changes in registrations relating to transfers, of our key trademarks in the Chinese mainland, including Sohu.com, Sohu Fox, www.focus.com.cn, Sohu Focus, GoodFeel, trademarks relating to Changyou products such as ChangYou.com, cyou.com, 17173, and the corresponding Chinese versions of the marks, so as to establish and protect our exclusive rights to these trademarks.
For a detailed discussion of Chinese mainland regulations, notices and circulars with respect to such restrictions, see “Governmental Regulation and Legal Uncertainties - Specific Statues and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies” and “Governmental Regulation and Legal Uncertainties - Specific Statues and Regulations - Regulation of the Online Game Services - Online Games and Cultural Products.” In addition, pursuant to the Notice on Establishing a Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“Circular 6”), which was promulgated by the General Office of the State Council in February 2011, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises with “national security” concerns.
For a detailed discussion of Chinese mainland regulations, notices and circulars with respect to such restrictions, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies” and “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Online Game Services - Online Games and Cultural Products.” 25 Table of Contents In addition, pursuant to the Notice on Establishing a Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“Circular 6”), which was promulgated by the General Office of the State Council in February 2011, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises with “national security” concerns.
If Changyou falls behind in adopting new technologies or standards, its existing games may lose popularity, its newly developed games may not be well received in the marketplace. 60 Table of Contents The proliferation of “cheating” programs and scam offers that seek to exploit Changyou’s games and players harms the game-playing experience and may lead players to stop playing its games.
If Changyou falls behind in adopting new technologies or standards, its existing games may lose popularity, its newly developed games may not be well received in the marketplace. The proliferation of “cheating” programs and scam offers that seek to exploit Changyou’s games and players harms the game-playing experience and may lead players to stop playing its games.
We cannot be certain that we will continue to be able to acquire content rights or develop premium content in the future and our user traffic and revenues generated from such content rights and self-developed content could be reduced.
We cannot be certain that we will continue to be able to acquire content rights or develop premium content in the future, and our user traffic and revenues generated from such content could be reduced.
Risk Related to Online Games There are uncertainties regarding the future growth of the online game industry in the Chinese mainland. The online game industry, from which Changyou derives most of its revenues, is a rapidly evolving industry.
Risks Related to Online Games There are uncertainties regarding the future growth of the online game industry in the Chinese mainland. The online game industry, from which Changyou derives most of its revenues, is a rapidly evolving industry.
In order to minimize the likelihood of such breaches as Changyou’s business expands and the amount of confidential and sensitive data increases, we expect that Changyou will need to expend considerable resources to maintain and enhance the effectiveness of its security systems. Rapid technological changes may increase Changyou’s game development costs.
In order to minimize the likelihood of such breaches as Changyou’s business expands and the amount of confidential and sensitive data increases, we expect that Changyou will need to expend considerable resources to maintain and enhance the effectiveness of its security systems. 59 Table of Contents Rapid technological changes may increase Changyou’s game development costs.
The expansion of Internet advertisement blocking software may result in a decrease in advertising revenues. The development of Web software that blocks Internet advertisements before they appear on a user’s screen may hinder the growth of online advertising.
The expansion of Internet advertisement blocking measures may result in a decrease in our advertising revenues. The development of Web software that blocks Internet advertisements before they appear on a user’s screen may hinder the growth of online advertising.
These arrangements pose substantial risks to us and our shareholders that are not present in conventional arrangements where operations are conducted through direct and indirect subsidiaries of holding companies. 25 Table of Contents The MIIT issued a circular in 2006 that emphasizes restrictions on foreign investment in value-added telecommunications businesses.
These arrangements pose substantial risks to us and our shareholders that are not present in conventional arrangements where operations are conducted through direct and indirect subsidiaries of holding companies. The MIIT issued a circular in 2006 that emphasizes restrictions on foreign investment in value-added telecommunications businesses.
If these standards do not develop, advertisers may choose not to advertise on the Internet in general or through our portals; • We may not have systems that are sufficiently well-developed to support our brand advertising business, and as a result, we may suffer system bugs that cause bad user experiences, errors, or omissions in publishing our client’s advertisements, which could have a negative impact on our brand advertising business.
If these standards do not develop, advertisers may choose not to advertise on the Internet in general or through our portals; 20 Table of Contents • We may not have systems that are sufficiently well-developed to support our brand advertising business, and as a result, we may suffer system bugs that cause bad user experiences, errors, or omissions in publishing our client’s advertisements, which could have a negative impact on our brand advertising business.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Other Sohu Business Sohu’s other business consists primarily of paid subscription services, revenue sharing from other platforms, and interactive broadcasting services. Revenues generated by Sohu from the other business are classified as other revenues in our consolidated statements of comprehensive income.
Other Sohu Business Sohu’s other business consists primarily of paid subscription services, interactive broadcasting services, and revenue sharing from other platforms. Revenues generated by Sohu from the other business are classified as other revenues in our consolidated statements of comprehensive income.
We also filed registration of trademarks relating to our subsidiary companies’ names and Changyou’s online games and other businesses in various countries and regions, such as the United States, European Union, Japan, Korea, Malaysia, Brazil, Taiwan, and Hong Kong. Our rights to these marks could be affected adversely if any of our applications are rejected.
We also filed registration of trademarks relating to our subsidiary companies’ names and Changyou’s online games and other businesses in various countries and regions, such as the United States, the European Union, Japan, Korea, Malaysia, Brazil, Taiwan, and Hong Kong. Our rights to these marks could be affected adversely if any of our applications are rejected.
(“Shanghai ICE”), Guanyou Gamespace, and Gamease hold Value-Added Telecommunication Services Operating Licenses (each an “ICP license”). The ICP license held by Sohu Internet includes a permit for operating Internet information services at “focus.cn.” In 2000, the MIIT promulgated the Internet Electronic Bulletin Service Administrative Measures (“BBS Measures”).
(“Shanghai ICE”), Guanyou Gamespace, and Gamease hold Value-Added Telecommunication Services Operating Licenses (each an “ICP license”). The ICP license held by Sohu Internet includes a permit for operating Internet information services at “focus.cn.” In 2000, the MIIT promulgated the Internet Electronic Bulletin Service Administrative Measures (the “BBS Measures”).
However, in practice certain local authorities still require operating companies to obtain approvals or make filings for the operation of BBS services. As of the date of this annual report, we have not been required by any regulatory authority in the Chinese mainland to obtain any approval or make any filing for the operation of BBS services.
However, in practice certain local authorities still require operating companies to obtain approvals or make filings for the operation of BBS services. As of the date of the filing of this annual report, we have not been required by any regulatory authority in the Chinese mainland to obtain any approval or make any filing for the operation of BBS services.
However, on September 2, 2014, the SAPPRFT issued a Notice on Further Strengthening the Administration of Online Foreign Audiovisual Content (“September 2014 SAPPRFT Notice”), which requires that operators of audiovisual Websites to obtain from the SAPPRFT a Film Public Screening Permit, TV Drama Distribution Permit, or TV Animation Distribution Permit for all foreign films and TV dramas before they are transmitted via the Internet in the Chinese mainland.
However, on September 2, 2014, the SAPPRFT issued a Notice on Further Strengthening the Administration of Online Foreign Audiovisual Content (the “September 2014 SAPPRFT Notice”), which requires that operators of audiovisual websites to obtain from the SAPPRFT a Film Public Screening Permit, TV Drama Distribution Permit, or TV Animation Distribution Permit for all foreign films and TV dramas before they are transmitted via the Internet in the Chinese mainland.
On February 17, 2011, the MCT issued the new Provisional Regulations for the Administration of Online Culture (“New Online Culture Regulations”), which took effect on April 1, 2011 and were amended on December 15, 2017, to replace the previous regulations.
On February 17, 2011, the MCT issued the new Provisional Regulations for the Administration of Online Culture (the “New Online Culture Regulations”), which took effect on April 1, 2011 and were amended on December 15, 2017, to replace the previous regulations.
On October 7, 1997, the State Radio Regulatory Bureau (formerly the State Radio Regulatory Commission), together with the SAMR (formerly the AQSIQ), promulgated Regulations on the Production of Radio Transmitting Equipment (the “Radio Transmitting Equipment Regulations”), which took effect on January 1, 1999.
On October 7, 1997, the State Radio Regulatory Bureau (formerly the State Radio Regulatory Commission), together with the SAMR (formerly the AQSIQ), promulgated the Regulations on the Production of Radio Transmitting Equipment (the “Radio Transmitting Equipment Regulations”), which took effect on January 1, 1999.
The State Commission for the Administration of Cryptography changed its name to the State Cryptography Administration Bureau (“SCAB”) in March 2005.
The State Commission for the Administration of Cryptography changed its name to the State Cryptography Administration Bureau (the “SCAB”) in March 2005.
On December 28, 2012, the Standing Committee of the National People’s Congress enacted the Decision to Enhance the Protection of Network Information (“Information Protection Decision”), to further enhance the protection of User Personal Information in electronic form.
On December 28, 2012, the Standing Committee of the National People’s Congress enacted the Decision to Enhance the Protection of Network Information (the “Information Protection Decision”), to further enhance the protection of User Personal Information in electronic form.
In this regard, on October 1, 2004, the Administrative Rules on the Filing of Commercial Websites (“Commercial Websites Filing Rules”) were promulgated by the Beijing Administration of Market Regulation (the “Beijing AMR”) to replace the Detailed Implementing Rules for the Measures for the Administration of Commercial Website Filings for the Record promulgated by the Beijing AMR on September 1, 2000.
In this regard, on October 1, 2004, the Administrative Rules on the Filing of Commercial Websites (the “Commercial Websites Filing Rules”) were promulgated by the Beijing Administration of Market Regulation (the “Beijing AMR”) to replace the Detailed Implementing Rules for the Measures for the Administration of Commercial Website Filings for the Record promulgated by the Beijing AMR on September 1, 2000.
Such service providers must provide notice of the purpose, methods and scope of their collection and use of user information, and obtain the consent of each person whose personal information will be collected.
Such service providers must provide notice of the purpose, methods and scope of their collection and use of user information, and obtain the consent of each person whose personal information will be collected.
Principal Variable Interest Entities As of the date of this annual report, the following are the principal VIEs in the Chinese mainland that we established, or the contracts with which we succeeded to, to perform value-added telecommunications services, online games, Internet publishing, online news information services, online audiovisual transmission, and certain other business activities in the Chinese mainland, because of the Chinese mainland’s legal restrictions on direct foreign investment in and operation of value-added telecommunications businesses, which restrictions are discussed in “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies.” We entered into contractual arrangements between the VIEs and our Chinese mainland subsidiaries that govern a substantial portion of our operations, including those of the brand advertising business, the online game business and the others business.
Principal Variable Interest Entities As of the date of the filing of this annual report, the following are the principal VIEs in the Chinese mainland that we established, or the contracts with which we succeeded to, to perform value-added telecommunications services, online games, Internet publishing, online news information services, online audiovisual transmission, and certain other business activities in the Chinese mainland, because of the Chinese mainland’s legal restrictions on direct foreign investment in and operation of value-added telecommunications businesses, which restrictions are discussed in “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies.” We entered into contractual arrangements between the VIEs and our Chinese mainland subsidiaries that govern a substantial portion of our operations, including those of the brand advertising business, the online game business and the others business.
Amendment (IX) provides, among other things discussed elsewhere in this report, that network service providers who do not comply with laws and regulations regarding the safe management of information on their networks and fail to correct their conduct after they receive notice of such non-compliance from relevant regulatory authorities, with results such as the dissemination of a substantial amount of illegal information or serious loss of evidence in criminal cases, may be convicted of the crime of failing to fulfill their obligations for the safe management of information on the Internet.
Amendment (IX) provides, among other things discussed elsewhere in this annual report, that network service providers who do not comply with laws and regulations regarding the safe management of information on their networks and fail to correct their conduct after they receive notice of such non-compliance from relevant regulatory authorities, with results such as the dissemination of a substantial amount of illegal information or serious loss of evidence in criminal cases, may be convicted of the crime of failing to fulfill their obligations for the safe management of information on the Internet.
The “NRTA,” the “NFA” and the “SPPA” as used in this report refer to the respective regulatory authorities after the reorganization; the “SAPPRFT” as used in this report refers to the regulatory authority that resulted from the merger for the period after the merger and prior to the reorganization, as well as to the GAPP and the SARFT separately for periods prior to the merger; • the China State Council Information Office (the “SCIO”); • the CAOC; • the SAFE; and • the China Banking and Insurance Regulatory Commission (the “CBIRC”), which resulted from the merger of, assumed the responsibilities previously held by, the China Banking Regulatory Commission (the “CBRC”) and the China Insurance Regulatory Commission (the “CIRC”) and has been integrated into the China National Financial Regulatory Administration (the “CNRA”).
The “NRTA,” the “NFA” and the “SPPA” as used in this annual report refer to the respective regulatory authorities after the reorganization; the “SAPPRFT” as used in this annual report refers to the regulatory authority that resulted from the merger for the period after the merger and prior to the reorganization, as well as to the GAPP and the SARFT separately for periods prior to the merger; • the China State Council Information Office (the “SCIO”); • the CAOC; • the SAFE; and • the China Banking and Insurance Regulatory Commission (the “CBIRC”), which resulted from the merger of, and assumed the responsibilities previously held by, the China Banking Regulatory Commission (the “CBRC”) and the China Insurance Regulatory Commission (the “CIRC”) and has been integrated into the China National Financial Regulatory Administration (the “CNRA”).
For new mobile games in particular, Changyou designs and implements different marketing strategies for different game genres to attract the genres’ target players. Changyou works closely with performance-based online advertising platforms such as Ocean Engine, Guang Dian Tong, and Fen Si Tong where Changyou can target different user groups.
For new mobile games in particular, Changyou designs and implements different marketing strategies for different game genres, in order to attract the genres’ target players. Changyou works closely with performance-based online advertising platforms such as Ocean Engine, Guang Dian Tong, and Fen Si Tong where Changyou can target different user groups.
The “SAMR” as used in this report refers to the regulatory authority that resulted from the merger, as well as to the SAIC, the AQSIQ, the SAC, and the SFDA separately for periods prior to the merger; • the SAPPRFT was reorganized into three separate regulatory authorities, the NRTA, the NFA, and the SPPA, in March 2018.
The “SAMR” as used in this annual report refers to the regulatory authority that resulted from the merger, as well as to the SAIC, the AQSIQ, the SAC, and the SFDA separately for periods prior to the merger; • the SAPPRFT was reorganized into three separate regulatory authorities, the NRTA, the NFA, and the SPPA, in March 2018.
Many of Changyou’s games offer players the option to purchase gift items to send to their friends. Examples of gift items include decorative items and time-limited items for special holiday events and festivals, such as Valentine’s Day, Spring Festival (Chinese New Year) and Christmas.
Gifts. Many of Changyou’s games offer players the option to purchase gift items to send to their friends. Examples of gift items include decorative items and time-limited items for special holiday events and festivals, such as Valentine’s Day, Spring Festival (Chinese New Year) and Christmas.
On May 11, 2004, Sohu Internet obtained from the Information Office of the Beijing Municipal Government (the local arm of the SCIO) an Internet news information services permit, which was updated by the SCIO on June 6, 2006, April 4, 2018 and April 4, 2021, respectively.
On May 11, 2004, Sohu Internet obtained from the Information Office of the Beijing Municipal Government (the local arm of the SCIO) an Internet news information services permit, which was updated by the SCIO on June 6, 2006, April 4, 2018, April 4, 2021, and April 4, 2024, respectively.
Key Information - Risk Factors.” Overview Regulatory authorities in the Chinese mainland have enacted an extensive regulatory scheme governing Internet-related areas, such as telecommunications, Internet information services, international connections to computer information networks, online game services, information security and censorship. 75 Table of Contents Various aspects of the Internet industry in the Chinese mainland are regulated by various regulatory authorities in the Chinese mainland, including, among others: • the MIIT, which resulted from the merger of the former Ministry of Information Industry and other regulatory departments; • the MCT, which was established in March 2018 and resulted from the merger of the former Ministry of Culture (the “MOC”), and the former China National Tourism Administration (the “CNTA”).
Key Information - Risk Factors.” Overview Regulatory authorities in the Chinese mainland have enacted an extensive regulatory scheme governing Internet-related areas, such as telecommunications, Internet information services, international connections to computer information networks, online game services, information security and censorship. 73 Table of Contents Various aspects of the Internet industry in the Chinese mainland are regulated by various regulatory authorities in the Chinese mainland, including, among others: • the MIIT, which resulted from the merger of the former Ministry of Information Industry and other regulatory departments; • the MCT, which was established in March 2018 and resulted from the merger of the former Ministry of Culture (the “MOC”), and the former China National Tourism Administration (the “CNTA”).
If our current ownership structure is found to be in violation of current or future Chinese mainland laws, rules or regulations regarding the legality of foreign investment in the Chinese mainland’s Internet sector, we could be subject to severe penalties.” and “Governmental Regulation and Legal Uncertainties,” the ownership structures of our principal Chinese mainland-based subsidiaries and the principal VIEs comply with all existing laws, rules and regulations of the Chinese mainland and each of such companies has the full legal right, power and authority, and has been duly approved, to carry on and engage in the business described in its business license.
If our current ownership structure is found to be in violation of current or future Chinese mainland laws, rules or regulations regarding the legality of foreign investment in the Chinese mainland’s Internet sector, we could be subject to severe penalties.” in Item 3 and “Governmental Regulation and Legal Uncertainties,” the ownership structures of our principal Chinese mainland-based subsidiaries and the principal VIEs comply with all existing laws, rules and regulations of the Chinese mainland and each of such companies has the full legal right, power and authority, and has been duly approved, to carry on and engage in the business described in its business license.
As of the date of this annual report, the Internet publishing license held by Guanyou Gamespace has expired, and Guanyou Gamespace is in the process of applying for renewal of such license. There is uncertainty as to whether Guanyou Gamespace will be able to renew such license.
As of the date of the filing of this annual report, the Internet publishing license held by Guanyou Gamespace has expired, and Guanyou Gamespace is in the process of applying for renewal of such license. There is uncertainty as to whether Guanyou Gamespace will be able to renew such license.
The “CBIRC” as used in this report refers to the regulatory authority that resulted from the merger during the period after the merger of the CBRC and the CIRC and prior to the CBIRC’s integration into CNRA, to the CBRC and the CIRC separately for periods prior to the merger of the CBRC and the CIRC, and to the CNRA for the period after the integration of the CBIRC into the CNRA.
The “CBIRC” as used in this annual report refers to the regulatory authority that resulted from the merger during the period after the merger of the CBRC and the CIRC and prior to the CBIRC’s integration into CNRA, to the CBRC and the CIRC separately for periods prior to the merger of the CBRC and the CIRC, and to the CNRA for the period after the integration of the CBIRC into the CNRA.
The Foreign Investment Enterprises Law and the Interim Filing Measures provide that, with certain exceptions, the establishment of FIEs is only subject to certain filing requirements with, and no longer requires prior approval by, MOFCOM or its local branches. 76 Table of Contents On March 15, 2019, the Standing Committee of the National People’s Congress issued the Foreign Investment Law, which took effect on January 1, 2020 and replaced the Foreign Investment Enterprises Law and other laws relating to foreign investment.
The Foreign Investment Enterprises Law and the Interim Filing Measures provide that, with certain exceptions, the establishment of FIEs is only subject to certain filing requirements with, and no longer requires prior approval by, MOFCOM or its local branches. 74 Table of Contents On March 15, 2019, the Standing Committee of the National People’s Congress issued the Foreign Investment Law, which took effect on January 1, 2020 and replaced the Foreign Investment Enterprises Law and other laws relating to foreign investment.
As of the date of this annual report, Sohu Internet is in the process of applying for renewal of the license, but there is uncertainty as to whether Sohu Internet will be able to renew it.
As of the date of the filing of this annual report, Sohu Internet is in the process of applying for renewal of the license, but there is uncertainty as to whether Sohu Internet will be able to renew it.
The Non-bank Payment Institutions Regulations require non-bank payment institutions to obtain a payment service license before applying for a business license, and to establish and continually update their internal systems, such as business management systems.
The Non-bank Payment Institutions Regulations and Rules require non-bank payment institutions to obtain a Payment Service License before applying for a business license, and to establish and continually update their internal systems, such as business management systems.
The Several Provisions also provide various rules to protect the interests of Internet information users, such as requesting Internet information service providers to take measures to protect the privacy information of their users and prohibiting Internet information service providers from cheating and misleading their users. 79 Table of Contents On August 25, 2017, the CAOC issued the Administration Measures for Internet Forum Community Service , effective on October 1, 2017, to regulate the provision of online interactive social network services for information dissemination.
The Several Provisions also provide various rules to protect the interests of Internet information users, such as requesting Internet information service providers to take measures to protect the privacy information of their users and prohibiting Internet information service providers from cheating and misleading their users. 77 Table of Contents On August 25, 2017, the CAOC issued the Administration Measures for Internet Forum Community Service , effective on October 1, 2017, to regulate the provision of online interactive social network services for information dissemination.
On June 30, 2016, the MIIT issued the Announcement of the Ministry of Industry and Information Technology on Issues concerning the Provision of Telecommunication Services in the Mainland by Service Providers from Hong Kong and Macao (the “MIIT Announcement”), which provides that investors from Hong Kong and Macau may hold more than 50% of the equity in FITEs engaging in certain specified categories of value-added telecommunications services.
On June 30, 2016, the MIIT issued the Announcement of the Ministry of Industry and Information Technology on Issues concerning the Provision of Telecommunication Services in the Mainland by Service Providers from Hong Kong and Macao , which provides that investors from Hong Kong and Macau may hold more than 50% of the equity in FITEs engaging in certain specified categories of value-added telecommunications services.
Laws and Regulations Related to Unfair Competition Pursuant to the Unfair Competition Law of the People’s Republic of China (the “Unfair Competition Law”), adopted by the Standing Committee of the National People’s Congress on November 4, 2017 and effective on April 23, 2019, a business operator is prohibited from taking any of the following actions: • unauthorized use of marks that are the same as or similar to the names, packaging, or decoration of another party’s products; • unauthorized use of another party’s organizational name or the name of an individual; • unauthorized use of another party’s domain name, website name, or webpage; and • other actions causing a third party to mistakenly believe that another party’s product is that of the business operator.
Laws and Regulations Related to Unfair Competition Pursuant to the Unfair Competition Law of the People’s Republic of China (the “Unfair Competition Law”), adopted by the Standing Committee of the National People’s Congress on November 4, 2017 and effective on April 23, 2019, a business operator is prohibited from taking any of the following actions: • unauthorized use of marks that are the same as or similar to the names, packaging, or decoration of another party’s products; • unauthorized use of another party’s organizational name or the name of an individual; • unauthorized use of another party’s domain name, website name, or webpage; and 102 Table of Contents • other actions causing a third party to mistakenly believe that another party’s product is that of the business operator.
An approved telecommunication services operator must conduct its business (whether basic or value-added) in accordance with the specifications recorded in its Telecommunications Services Operating License. 77 Table of Contents The business activities of the VIE Sohu Internet include providing content to mobile phone users through the platforms of the Chinese mainland’s main three telecommunications operators.
An approved telecommunication services operator must conduct its business (whether basic or value-added) in accordance with the specifications recorded in its Telecommunications Services Operating License. 75 Table of Contents The business activities of the VIE Sohu Internet include providing content to mobile phone users through the platforms of the Chinese mainland’s main three telecommunications operators.
On August 25, 2017, the CAOC issued the Administration Measures for Internet Comment Thread Services , which was amended on November 16, 2022, regulating the provision of comment-thread services by websites, applications, and other Internet platforms with media and social mobilization characteristics that allow users to release text, photos, audio, and video.
On August 25, 2017, the CAOC issued the Administration Measures for Internet Comment Thread Services , which were amended on November 16, 2022, regulating the provision of comment-thread services by websites, applications, and other Internet platforms with media and social mobilization characteristics that allow users to release text, photos, audio, and video.
ORGANIZATIONAL STRUCTURE The charts below present the principal consolidated entities of Sohu.com Limited, including our consolidated Changyou entities as of the date of this annual report.
ORGANIZATIONAL STRUCTURE The charts below present the principal consolidated entities of Sohu.com Limited, including our consolidated Changyou entities as of the date of the filing of this annual report.
On December 17, 2012, the Supreme People’s Court promulgated the Provisions on Several Issues Concerning the Application of Law for Trial of Civil Dispute Cases Involving Infringement of the Right to Network Dissemination of Information (“Network Dissemination of Information Provision”), which were most recently amended on December 29, 2020.
On December 17, 2012, the Supreme People’s Court promulgated the Provisions on Several Issues Concerning the Application of Law for Trial of Civil Dispute Cases Involving Infringement of the Right to Network Dissemination of Information (the “Network Dissemination of Information Provisions”), which were most recently amended on December 29, 2020.
On July 20, 2009, the MCT promulgated the Filing Guidelines for Online Game Virtual Currency Issuing Enterprises and Online Game Virtual Currency Trading Enterprises (the “Virtual Currency Guidelines”), which define the terms “issuing enterprise” and “trading enterprise” and stipulate that the same enterprise may not be both an issuing enterprise and a trading enterprise.
On July 20, 2009, the MCT promulgated the Filing Guidelines for Online Game Virtual Currency Issuing Enterprises and Online Game Virtual Currency Trading Enterprises , which define the terms “issuing enterprise” and “trading enterprise” and stipulate that the same enterprise may not be both an issuing enterprise and a trading enterprise.
Certain intermediate holding companies that are not significant to the Sohu Group have been eliminated. 110 Table of Contents 111 Table of Contents Principal Subsidiaries The following are our principal subsidiaries: • Sohu.com (Hong Kong) Limited, or Sohu HK, established in 2000; • Beijing Sohu New Era Information Technology Co., Ltd., or Sohu Era, established in 2003; • Sohu.com (Search) Limited, or Sohu Search, established in 2005; • Beijing Sohu New Media Information Technology Co., Ltd., or Sohu Media, established in 2006; • Changyou.com Limited, or Changyou, established in 2007; • Changyou.com (HK) Limited, or Changyou HK, established in 2007; • Beijing AmazGame Age Internet Technology Group Co., Ltd., or AmazGame, established in 2007; • Sohu.com (Game) Limited, or Sohu Game, established in 2008; • Beijing Changyou Gamespace Software Technology Co., Ltd., or Gamespace, established in 2009; • Changyou.com Korea LLC, or Changyou Korea, established in 2010; • Beijing Sohu New Momentum Information Technology Co., Ltd., or Sohu New Momentum, established in 2010; • Fox Information Technology (Tianjin) Limited, or Video Tianjin, established in 2011; • Sohu Focus Limited, or Sohu Focus, established in 2013; • Sohu Focus (HK) Limited, or Focus HK, established in 2013; and • Beijing Changyou Chuangxiang Software Technology Co., Ltd., or Changyou Chuangxiang, established in 2016.
Certain intermediate holding companies that are not significant to the Sohu Group have been eliminated. 107 Table of Contents 108 Table of Contents Principal Subsidiaries The following are our principal subsidiaries: • Sohu.com (Hong Kong) Limited, or Sohu HK, established in 2000; • Beijing Sohu New Era Information Technology Co., Ltd., or Sohu Era, established in 2003; • Sohu.com (Search) Limited, or Sohu Search, established in 2005; • Beijing Sohu New Media Information Technology Co., Ltd., or Sohu Media, established in 2006; • Changyou.com Limited, or Changyou, established in 2007; • Changyou.com (HK) Limited, or Changyou HK, established in 2007; • Beijing AmazGame Age Internet Technology Group Co., Ltd., or AmazGame, established in 2007; • Sohu.com (Game) Limited, or Sohu Game, established in 2008; • Beijing Changyou Gamespace Software Technology Co., Ltd., or Gamespace, established in 2009; • Changyou.com Korea LLC, or Changyou Korea, established in 2010; • Beijing Sohu New Momentum Information Technology Co., Ltd., or Sohu New Momentum, established in 2010; • Fox Information Technology (Tianjin) Limited, or Video Tianjin, established in 2011; • Sohu Focus Limited, or Sohu Focus, established in 2013; • Sohu Focus (HK) Limited, or Focus HK, established in 2013; and • Beijing Changyou Chuangxiang Software Technology Co., Ltd., or Changyou Chuangxiang, established in 2016.
Online News Dissemination and Online News Search Services In May 2017, the Administrative Regulations for Internet News Information Services and Implementation Rules on the Administration of Internet News Information Services Permits (collectively the “News Regulations”) were promulgated by the CAOC to replace the Administrative Rules for Internet News Information Services promulgated by the SCIO in 2005 (the “Old News Rules”).
Online News Dissemination and Online News Search Services In May 2017, the Administrative Regulations for Internet News Information Services and Implementation Rules on the Administration of Internet News Information Services Permits (collectively the “News Regulations”) were promulgated by the CAOC to replace the Administrative Rules for Internet News Information Services promulgated by the SCIO in 2005.
An amendment of the Unfair Competition Law that became effective on January 1, 2018 increases the maximum amount of administrative penalties that may be imposed for violations. An additional amendment of the Unfair Competition Law that became effective on April 23 2019 increases the amount of administrative penalties that may be imposed for malicious misappropriation of trade secrets.
An amendment of the Unfair Competition Law that became effective on January 1, 2018 increased the maximum amount of administrative penalties that may be imposed for violations. An additional amendment of the Unfair Competition Law that became effective on April 23, 2019 increased the amount of administrative penalties that may be imposed for malicious misappropriation of trade secrets.
In November 2011, the SAFE approved our application to designate our Chinese mainland subsidiary Sohu Media to handle the registrations and other procedures required by the Offshore Share Incentives Rules. In February 2012, the SAFE approved Changyou’s application to designate its Chinese mainland subsidiary AmazGame to handle the registrations and other procedures required by the Offshore Share Incentive Rules.
In November 2011, the SAFE approved our application to designate our Chinese mainland subsidiary Sohu Media to handle the registrations and other procedures required by the Offshore Share Incentives Rule. In February 2012, the SAFE approved Changyou’s application to designate its Chinese mainland subsidiary AmazGame to handle the registrations and other procedures required by the Offshore Share Incentive Rule.
We received gross consideration of approximately $1.18 billion in cash from the Tencent/Sohu Sogou Share Purchase, and we no longer have any beneficial ownership interest in Sogou. 66 Table of Contents In August 2007, our wholly-owned subsidiary Changyou.com Limited was incorporated in the Cayman Islands. In December 2007, we transferred our online game business to Changyou.
We received gross consideration of approximately $1.18 billion in cash from the Tencent/Sohu Sogou Share Purchase, and we no longer have any beneficial ownership interest in Sogou. In August 2007, our wholly-owned subsidiary Changyou.com Limited was incorporated in the Cayman Islands. In December 2007, we transferred our online game business to Changyou.
Given that advertisers benefit from displayed advertisements evenly over the period the advertisements are displayed, we recognize revenue on a straight-line basis over the period of display, provided all revenue recognition criteria have been met. CPM model Under the CPM model, the unit price for each qualifying display is fixed and stated in the contract with the advertiser.
Given that advertisers benefit from displayed advertisements evenly over the period the advertisements are displayed, we recognize revenue on a straight-line basis over the period of display, provided all revenue recognition criteria have been met. 67 Table of Contents CPM Model Under the CPM model, the unit price for each qualifying display is fixed and stated in the contract with the advertiser.
The Online Culture Operating Permit obtained by Sohu Internet includes a permit for operating Internet information services at “sohu.com.” On September 2, 2016, the SAPPRFT issued the Notice on Strengthening the Management of Live Online Social Video Services (the “Live Online Notice”), which requires interactive broadcasting service providers to procure a permit for the Network Transmission of Audiovisual Programs.
The Online Culture Operating Permit obtained by Sohu Internet includes a permit for operating Internet information services at “sohu.com.” 83 Table of Contents On September 2, 2016, the SAPPRFT issued the Notice on Strengthening the Management of Live Online Social Video Services (the “Live Online Notice”), which requires interactive broadcasting service providers to procure a permit for the Network Transmission of Audiovisual Programs.
The lottery sales agencies and the Telephone Sales Agent must enter into a commission agreement. A qualified Telephone Sales Agent is required to meet certain criteria, including having obtained a Value-Added Telecommunications Services Operating License.
Lottery sales agencies and Telephone Sales Agents must enter into a commission agreement. A qualified Telephone Sales Agent is required to meet certain criteria, including having obtained a Value-Added Telecommunications Services Operating License.
To further implement the Antitrust Law and clarify certain issues, the State Council, the MOFCOM, the NDRC, and the SAMR issued several regulations and rules, including the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings issued by the State Council on August 3, 2008 and amended on September 18, 2018; the Regulations on the Prohibition of Monopolistic Agreements , which were issued by the SAMR on March 10, 2023 and took effect on April 15, 2023 to replace the Interim Regulations on the Prohibition of Monopolistic Agreements ; the Regulations on the Prohibition of Conduct Constituting an Abuse of a Dominant Market Position , which were issued by the SAMR on March 10, 2023 and took effect on April 15, 2023 to replace the Interim Regulations on the Prohibition of Conduct Constituting an Abuse of a Dominant Market Position issued by the SAMR; the Declaration Rules for Concentrations of Undertakings issued by the MOFCOM on January 5, 2009, amended on June 6, 2014, and re-issued by the SAMR on September 29, 2018, and the Provisions on Reviewing Concentration of Undertakings, which were issued by the SAMR on March 10, 2023 and took effect on April 15, 2023 to replace the Interim Provisions on Reviewing Concentrations of Undertakings issued by the SAMR.
To further implement the Antitrust Law and clarify certain issues, the State Council, the MOFCOM, the NDRC, and the SAMR issued several regulations and rules, including the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings issued by the State Council on August 3, 2008 and amended on September 18, 2018; the Regulations on the Prohibition of Monopolistic Agreements , which were issued by the SAMR on March 10, 2023 and took effect on April 15, 2023 to replace the Interim Regulations on the Prohibition of Monopolistic Agreements ; the Regulations on the Prohibition of Conduct Constituting an Abuse of a Dominant Market Position , which were issued by the SAMR on March 10, 2023 and took effect on April 15, 2023 to replace the Interim Regulations on the Prohibition of Conduct Constituting an Abuse of a Dominant Market Position issued by the SAMR; the Declaration Rules for Concentrations of Undertakings originally issued by the MOFCOM on January 5, 2009, amended by the MOFCOM on June 6, 2014, and re-issued by the SAMR on September 29, 2018; the Provisions on Reviewing Concentration of Undertakings, which were issued by the SAMR on March 10, 2023 and took effect on April 15, 2023 to replace the Interim Provisions on Reviewing Concentrations of Undertakings issued by the SAMR; and the Guidelines for Reviewing Horizontal Concentrations of Undertakings issued by the SAMR on December 10, 2024.
On January 30, 2015, the MIIT issued to the VIE Guangzhou Qianjun Network Technology Co., Ltd. (“Guangzhou Qianjun”) a Value-Added Telecommunications Services Operating License, which was renewed on November 23, 2019, that authorizes the provision of Internet information services, which are also classified as value-added telecommunication services.
On January 30, 2015, the MIIT issued to the VIE Guangzhou Qianjun Network Technology Co., Ltd. (“Guangzhou Qianjun”) a Value-Added Telecommunications Services Operating License, which was renewed on November 23, 2019 and November 23, 2024, respectively, that authorizes the provision of Internet information services, which are also classified as value-added telecommunication services.
Under the FITE Regulations and in accordance with WTO-related agreements, unless otherwise provided by the state, the foreign party to a foreign-invested telecommunications Chinese mainland enterprise (“FITEs”) engaging in value-added telecommunications services may hold up to 50% of the equity of the FITE, with no geographic restrictions on the FITE’s operations.
Under the FITE Regulations and in accordance with WTO-related agreements, unless otherwise provided by the state, the foreign party to a foreign-invested telecommunications Chinese mainland enterprise (an “FITE”) engaging in value-added telecommunications services may hold up to 50% of the equity of the FITE, with no geographic restrictions on the FITE’s operations.
Protection of Minors On March 29, 2019, the SAPPRFT issued the Administrative Regulations Regarding Programs for Minors (the “Programs for Minors Regulations”), which took effect on April 30, 2019 and was amended on October 8, 2021.
Protection of Minors On March 29, 2019, the SAPPRFT issued the Administrative Regulations Regarding Programs for Minors (the “Programs for Minors Regulations”), which took effect on April 30, 2019 and were amended on October 8, 2021.
On September 2, 2021, the NRTA issued the Notice on Further Strengthening the Management of Arts and Their Personnel , under which online audiovisual platforms are required to strictly control the selection of actors and are prohibited from engaging actors with political positions considered to be wrong or who engage in deeds or use words considered to be immoral, actors considered to not be adhering to an acceptable level of social fairness and justice, or actors violating laws, regulations, or the public order.
On September 2, 2021, the NRTA issued the Notice on Further Strengthening the Management of Arts and Their Personnel , under which online audiovisual platforms are required to strictly control the selection of actors and are prohibited from engaging actors who engage in deeds or use words considered to be immoral, actors considered to not be adhering to an acceptable level of social fairness and justice, or actors violating laws, regulations, or the public order.
The Order states, in broad terms, that violators may face warnings, fines, and disclosure to the public and, in the most severe cases, criminal liability. On January 5, 2015, the SAMR promulgated the Measures on Punishment for Infringement of Consumer Rights, which were amended on October 23, 2020.
The Order states, in broad terms, that violators may face warnings, fines, and disclosure to the public and, in the most severe cases, criminal liability. 96 Table of Contents On January 5, 2015, the SAMR promulgated the Measures on Punishment for Infringement of Consumer Rights, which were amended on October 23, 2020.
Mobile Internet Applications Information Services On June 28, 2016, the CAOC issued the Provisions on the Administration of Mobile Internet Applications Information Services (the “App Provisions”), which became effective on August 1, 2016 and was amended on June 14, 2022.
Mobile Internet Applications Information Services On June 28, 2016, the CAOC issued the Provisions on the Administration of Mobile Internet Applications Information Services (the “App Provisions”), which became effective on August 1, 2016 and were amended on June 14, 2022.
These telecommunication operators provide Sohu with support services twenty-four hours per day, seven days per week. They also provide connectivity for Sohu’s servers through multiple high-speed connections. All facilities are protected by Uninterruptible Power Supplies. For reliability, availability, and serviceability, Sohu has created an environment in which each server can function independently.
These telecommunication operators provide Sohu with support services twenty-four hours per day, seven days per week. They also provide connectivity for Sohu’s servers through multiple high-speed connections. All facilities are protected by Uninterruptible Power Supplies. 70 Table of Contents For reliability, availability, and serviceability, Sohu has created an environment in which each server can function independently.
The MCT issued the New Provisional Regulations for the Administration of Online Culture , or the Online Culture Regulations, which took effect on April 1, 2011 and was amended on December 15, 2017 and replaced the Provisional Regulations for the Administration of Online Culture .
The MCT issued the New Provisional Regulations for the Administration of Online Culture , or the Online Culture Regulations, which took effect on April 1, 2011 and were amended on December 15, 2017 and replaced the Provisional Regulations for the Administration of Online Culture .
In addition, China Mobile announced a temporary suspension of billing for Wireless Application Protocol (“WAP”) services, as a means of fighting against Websites providing pornographic content. 104 Table of Contents On April 13, 2014, the National Working Group on Anti-Pornography and three other regulatory authorities in the Chinese mainland jointly issued the Proclamation of Special Action Regarding Crackdown on Online Pornographic Content (the “Anti-Pornography Proclamation”).
In addition, China Mobile announced a temporary suspension of billing for Wireless Application Protocol services, as a means of fighting against websites providing pornographic content. On April 13, 2014, the National Working Group on Anti-Pornography and three other regulatory authorities in the Chinese mainland jointly issued the Proclamation of Special Action Regarding Crackdown on Online Pornographic Content (the “Anti-Pornography Proclamation”).
Changyou’s online games include games that it self-operates and games that it licenses out to third-party operators. 70 Table of Contents Self-Operated Games For self-operated games, Changyou determines the price of virtual items based on the demand or expected demand for such virtual items. Changyou may change the pricing of certain virtual items based on their consumption patterns.
Changyou’s online games include games that it self-operates and games that it licenses out to third-party operators. Self-operated Games For self-operated games, Changyou determines the price of virtual items based on the demand or expected demand for such virtual items. Changyou may change the pricing of certain virtual items based on their consumption patterns.
Dr. Charles Zhang, our Chairman of the Board and Chief Executive Officer, and Wei Li, one of our employees, hold 80% and 20% interests, respectively, in this entity; • Beijing Heng Da Yi Tong Information Technology Co., Ltd., or Heng Da Yi Tong, incorporated in 2002. Dr.
Dr. Charles Zhang, our Chairman of the Board and Chief Executive Officer, and Wei Li, one of our employees, hold 80% and 20% interests, respectively, in this entity; 109 Table of Contents • Beijing Heng Da Yi Tong Information Technology Co., Ltd., or Heng Da Yi Tong, incorporated in 2002. Dr.
The VIEs Sohu Internet and Guangzhou Qianjun currently hold permits, both for PC and for Mobile Apps, for the Network Transmission of Audiovisual Programs. 81 Table of Contents On March 30, 2009, the SAPPRFT released a Notice on Strengthening the Administration of Online Audiovisual Content (the “March 2009 SAPPRFT notice”).
The VIEs Sohu Internet and Guangzhou Qianjun currently hold permits, both for PC and for Mobile Apps, for the Network Transmission of Audiovisual Programs. On March 30, 2009, the SAPPRFT released a Notice on Strengthening the Administration of Online Audiovisual Content (the “March 2009 SAPPRFT notice”).
Changyou’s overseas marketing strategies also include using social media platforms, search engine management, and outdoor advertisements to promote its games. COMPETITION The Internet and Internet-related markets in the Chinese mainland are evolving. We believe that attention to the Chinese mainland Internet market from both domestic and multinational competitors will continue to increase.
Changyou’s overseas marketing strategies also include using social media platforms, search engine management, and outdoor advertisements to promote its games. 71 Table of Contents COMPETITION The Internet and Internet-related markets in the Chinese mainland are evolving. We believe that attention to the Chinese mainland Internet market from both domestic and multinational competitors will continue to increase.
The Payment Services Measures and their implementing rules require any non-financial institution engaging in payment services, such as online payments, issuance and acceptance of prepaid cards, and bill collection via bank cards, to obtain a Payment Service License. Applications for Payment Service Licenses are examined by the local branches of the PBOC and then submitted to the PBOC for approval.
The Payment Services Measures and Rules required any non-financial institution engaging in payment services, such as online payments, issuance and acceptance of prepaid cards, and bill collection via bank cards, to obtain a Payment Service License. Applications for Payment Service Licenses are examined by the local branches of the PBOC and then submitted to the PBOC for approval.
Changyou uses a variety of virtual items to promote interaction and to facilitate relationship-building among game players in its games. Personalized and Customized Appearance. Many of Changyou’s games offer players the option to purchase decorative and functional items to customize the appearance of their characters, pets, vehicles, houses and other in-game possessions to express their individuality. Gifts.
Changyou uses a variety of virtual items to promote interaction and to facilitate relationship-building among game players in its games. 68 Table of Contents Personalized and Customized Appearance. Many of Changyou’s games offer players the option to purchase decorative and functional items to customize the appearance of their characters, pets, vehicles, houses and other in-game possessions to express their individuality.
On August 8, 2014, the MIIT issued to Sohu Internet a Value-Added Telecommunication Services Operating License, which was renewed on July 23, 2019, that authorizes the provision of Internet data center services, Internet content distribution services, and Internet access services, all of which are classified as value-added telecommunication services.
On August 8, 2014, the MIIT issued to Sohu Internet a Value-Added Telecommunication Services Operating License, which was renewed on July 23, 2019 and June 5, 2024, respectively, that authorizes the provision of Internet data center services, Internet content distribution services, and Internet access services, all of which are classified as value-added telecommunication services.
Changyou has granted exclusive licenses to Tencent to distribute and operate its mobile games Legacy TLBB Mobile and New TLBB Mobile within the Chinese mainland, and has licensed its PC game TLBB PC and mobile game Legacy TLBB Mobile to third-party operators in selected markets outside of the Chinese mainland, including Hong Kong, Taiwan, Vietnam, and Malaysia.
Changyou has granted exclusive licenses to Tencent to distribute and operate its mobile games Legacy TLBB Mobile and New TLBB Mobile within the Chinese mainland, and has licensed its PC game TLBB PC, as well as its mobile games Legacy TLBB Mobile and New TLBB Mobile, to third-party operators in selected markets outside of the Chinese mainland, including Taiwan, Vietnam, and Malaysia.
We have registered 3,538 trademarks with the Trademark Office of the CNIPA, including the marks “SOHU.com,” “ChangYou.com,” and “cyou.com” and marks relating to our products such as Sohu.com, Sohu Fox, GoodFeel, Sohu Focus, Blade Online, and 17173, and the corresponding Chinese versions of the marks.
We have registered 2,576 trademarks with the Trademark Office of the CNIPA, including the marks “SOHU.com,” “ChangYou.com,” and “cyou.com” and marks relating to our products such as Sohu.com, Sohu Fox, GoodFeel, Sohu Focus, Blade Online, and 17173, and the corresponding Chinese versions of the marks.
Revenues derived from the operation of online games are classified as online game revenues in our consolidated statements of comprehensive income. Changyou’s dominant games are its PC game TLBB and its mobile game Legacy TLBB Mobile.
Revenues derived from the operation of online games are classified as online game revenues in our consolidated statements of comprehensive income. 66 Table of Contents Changyou’s dominant games are its PC game TLBB and its mobile game Legacy TLBB Mobile.
Further, we continually develop and generate high-quality livestreaming content, particularly science and knowledge-based live broadcasts, and promote our self-developed video content across diversified online social media platforms to attract users and professional broadcasters in various fields to our platforms. We work closely with mobile application stores as well as performance-based online advertising platforms.
Further, we continually develop and distribute high-quality livestreaming content, particularly science and knowledge-based live broadcasts, and promote our self-developed video content across other online social media platforms to attract users and professional broadcasters in various fields to our platform. We work closely with mobile application stores as well as performance-based online advertising platforms.
Charles Zhang and Wei Li hold 80% and 20% interests, respectively, in this entity; • Beijing Sohu Internet Information Service Co., Ltd., or Sohu Internet, incorporated in 2003. High Century holds a 100% interest in this entity; 112 Table of Contents • Beijing Gamease Age Digital Technology Co., Ltd., or Gamease, incorporated in 2007.
Charles Zhang and Wei Li hold 80% and 20% interests, respectively, in this entity; • Beijing Sohu Internet Information Service Co., Ltd., or Sohu Internet, incorporated in 2003. High Century holds a 100% interest in this entity; • Beijing Gamease Age Digital Technology Co., Ltd., or Gamease, incorporated in 2007.
We are the registered owner of 360 registered trademarks and have applied for eight trademarks in countries and regions outside of the Chinese mainland. In addition, certain of our marks have been recognized as well-known Chinese trademarks by Chinese mainland courts in a series of court rulings.
We are the registered owner of 124 registered trademarks and have applied for four trademarks in countries and regions outside of the Chinese mainland. In addition, certain of our marks have been recognized as well-known Chinese trademarks by Chinese mainland courts in a series of court rulings.
In order to further implement the Computer Software Protection Regulations , promulgated by the State Council on December 20, 2001 and amended on May 19, 2004 and January 30, 2013, the NCA issued Computer Software Copyright Registration Procedures on February 20, 2002 and amended it on May 19, 2004, which specify detailed procedures and requirements with respect to the registration of software copyrights.
In order to further implement the Computer Software Protection Regulations , promulgated by the State Council on December 20, 2001 and amended on May 19, 2004 and January 30, 2013, the NCA issued the Computer Software Copyright Registration Procedures on February 20, 2002 and amended them on May 19, 2004, specifying detailed procedures and requirements with respect to the registration of software copyrights.
MARKETING Sohu As Sohu is a leading Chinese online media company, our brand effectively provides us with built-in word-of-mouth marketing and we have significantly benefited from this recognition of our brand in the Chinese mainland.
MARKETING Sohu As Sohu is a leading Chinese online media content and services provider, our brand effectively provides us with built-in word-of-mouth marketing and we have significantly benefited from this recognition of our brand in the Chinese mainland.
For the details of the Internet publishing licenses held by the VIEs through which Changyou operates its business, see “Specific Statutes and Regulations - Regulation of Online Game Services - Online Games and Cultural Products.” Online Audiovisual Transmission Through the Public Internet On December 20, 2007, the SAPPRFT and the MIIT jointly issued Rules for the Administration of Internet Audiovisual Program Services (“Document 56”), which came into effect as of January 31, 2008 and was amended on August 28, 2015.
For the details of the Internet publishing licenses held by the VIEs through which Changyou operates its business, see “- Regulation of Online Game Services - Online Games and Cultural Products.” 79 Table of Contents Online Audiovisual Transmission Through the Public Internet On December 20, 2007, the SAPPRFT and the MIIT jointly issued the Rules for the Administration of Internet Audiovisual Program Services (“Document 56”), which came into effect as of January 31, 2008 and were amended on August 28, 2015.
Our remote control system allows us to track our concurrent online users in real time, and discover and fix hardware or software problems on our server network in a timely fashion. Sohu As of December 31, 2023, Sohu maintained approximately 8,000 servers in the Chinese mainland.
Our remote control system allows us to track our concurrent online users in real time, and discover and fix hardware or software problems on our server network in a timely fashion. Sohu As of December 31, 2024, Sohu maintained approximately 7,277 servers in the Chinese mainland.
Also see “Governmental Regulation and Legal Uncertainties - Regulation of the Provision of Internet Content - Protection of Minors.” On May 15, 2020, the Supreme People’s Court issued several guiding opinions on civil cases.
Also see “- Regulation of the Provision of Internet Content - Protection of Minors.” On May 15, 2020, the Supreme People’s Court issued several guiding opinions on civil cases.
As of December 31, 2023, Changyou leased office space of approximately 3,159 square meters in the Chinese mainland and in other countries. GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES The following description of laws and regulations of the Chinese mainland is based upon the opinion of Haiwen & Partners, or Haiwen, our Chinese mainland legal counsel.
As of December 31, 2024, Changyou leased office space of approximately 2,260 square meters in the Chinese mainland and in other countries. GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES The following description of laws and regulations of the Chinese mainland is based upon the opinion of Haiwen & Partners, or Haiwen, our Chinese mainland legal counsel.
The principal laws and regulations governing distribution of dividends of foreign holding companies were the Foreign Investment Enterprise Law (1986), which was amended in October 2000 and October 2016, and the Administrative Rules under the Foreign Investment Enterprise Law (2001), which were amended in February 2014.
Prior to 2020, the principal laws and regulations governing distribution of dividends of foreign holding companies were the Foreign Investment Enterprises Law (1986), which was amended in October 2000 and October 2016, and the Administrative Rules under the Foreign Investment Enterprises Law (2001), which were amended in February 2014.
As of the date of this annual report, the Draft Online Games Administration Measures have not been formally adopted. 88 Table of Contents The Notice on Strengthening the Approval and Administration of Imported Online Games , or the Imported Online Game Notice, which was issued by the SAPPRFT and took effect in July 2009, states that the SAPPRFT was, and the SPPA as a successor to the SAPPRFT is, the only regulatory authority authorized by the State Council to approve the importation of online games from Offshore copyright owners, and that any enterprise which engages in online game publication and operation services within the Chinese mainland must have the game examined and approved by the SAPPRFT or the SPPA and receive from the SAPPRFT or the SPPA an Internet publishing license (or after the New Internet Publication Measures became effective on March 10, 2016, an online publishing services license).
The Notice on Strengthening the Approval and Administration of Imported Online Games , or the Imported Online Game Notice, which was issued by the SAPPRFT and took effect in July 2009, states that the SAPPRFT was, and the SPPA as a successor to the SAPPRFT is, the only regulatory authority authorized by the State Council to approve the importation of online games from Offshore copyright owners, and that any enterprise which engages in online game publication and operation services within the Chinese mainland must have the game examined and approved by the SAPPRFT or the SPPA and receive from the SAPPRFT or the SPPA an Internet publishing license (or after the New Internet Publication Measures became effective on March 10, 2016, an online publishing services license).
We have not been required to go through any cybersecurity review by the CAOC under the Cybersecurity Laws as currently in effect; and we believe that we are unlikely to be required by the CAOC to go through cybersecurity reviews due to the facts that (i) our ADSs were listed on Nasdaq before the Cybersecurity Laws went into effect, and the Cybersecurity Laws do not require Internet platform operators that hold personal information of over one million users to file supplemental applications for cybersecurity reviews of such operators’ previous issuances of their securities to foreign investors that occurred before the Cybersecurity Laws went into effect; (ii) the competent regulatory and supervisory authorities in the Chinese mainland are required under the CII Regulations to identify critical information infrastructure and the CIIOs of such critical information infrastructure, and to notify all CIIOs that have been so identified, and we have not received any such notice; (iii) the nature of the data that we process in our business is such that it is unlikely that Chinese mainland authorities would conclude that such data impact or may impact national security; and (iv) we have not been required to go through a cybersecurity review initiated by the CAOC, nor are we aware of any preliminary investigation of our company by the CAOC that might lead to such a review.
We have not been required to go through any cybersecurity review by the CAOC under the Cybersecurity Laws as currently in effect; and we believe that we are unlikely to be required by the CAOC to go through cybersecurity reviews due to the facts that (i) our ADSs were listed on Nasdaq before the Cybersecurity Laws went into effect, and the Cybersecurity Laws do not require Internet platform operators that hold personal information of over one million users to file supplemental applications for cybersecurity reviews of such operators’ previous issuances of their securities to foreign investors that occurred before the Cybersecurity Laws went into effect; (ii) the competent regulatory and supervisory authorities in the Chinese mainland are required under the CII Regulations to identify critical information infrastructure and the CIIOs of such critical information infrastructure, and to notify all CIIOs that have been so identified, and we have not received any such notice; (iii) the nature of the data that we process in our business is such that it is unlikely that Chinese mainland authorities would conclude that such data impact or may impact national security; and (iv) we have not been required to go through a cybersecurity review initiated by the CAOC, nor are we aware of any preliminary investigation of our company by the CAOC that might lead to such a review. 99 Table of Contents On December 28, 2021, several regulatory authorities in the Chinese mainland including the CAOC, issued the Measures for Cybersecurity Review, which took effect on February 15, 2022 and replaced the previous version promulgated on April 13, 2020.
Other Sohu Business Sohu’s other business consists primarily of paid subscription services, revenue sharing from other platforms, and interactive broadcasting services. Revenues generated by Sohu from the other business are classified as other revenues in our consolidated statements of comprehensive income. Changyou’s Business Changyou’s business consists of the online game business and the platform channel business.
Revenues generated by Sohu from the brand advertising business are classified as brand advertising revenues in our consolidated statements of comprehensive income. Other Sohu Business Sohu’s other business consists primarily of paid subscription services, interactive broadcasting services, and revenue sharing from other platforms.
PC games are interactive online games that are accessed and played simultaneously by hundreds of thousands of game players through personal computers and require that local client-end game access software be installed on the computers used. • Mobile games. Mobile games are played on mobile devices and require an Internet connection.
Online Game Business Changyou’s online game business offers PC games and mobile games to game players. • PC games. PC games are interactive online games that are accessed and played simultaneously by hundreds of thousands of game players through personal computers and require that local client-end game access software be installed on the computers used. • Mobile games.
On November 13, 2017, Sogou completed its IPO on NYSE, trading under the symbol “SOGO.” On September 23, 2021, we completed the Tencent/Sohu Sogou Share Purchase contemplated by the Tencent/Sohu Sogou Share Purchase Agreement, in which our wholly-owned subsidiary Sohu Search sold all of the Class A ordinary shares of Sogou and Class B ordinary shares of Sogou owned by Sohu Search to Tencent Merger Sub at a purchase price of $9.00 per share.
On November 13, 2017, Sogou completed its IPO on NYSE, trading under the symbol “SOGO.” On September 23, 2021, we completed the Tencent/Sohu Sogou Share Purchase, in which our wholly-owned subsidiary Sohu Search sold all of the Sogou equity shares owned by Sohu Search to an indirect wholly-owned subsidiary of Tencent at a purchase price of $9.00 per share.
On December 1, 2010, the PBOC promulgated the Implementing Rules for the Payment Services Measures , which was last amended on September 1, 2021.
On December 1, 2010, the PBOC promulgated the Implementing Rules for the Payment Services Measures (together with the Payment Services Measures, the “Payment Services Measures and Rules”), which was last amended on September 1, 2021.
Requirements of News Regulations include, among other things, the following: • Internet news information service providers must be entities duly incorporated within the territory of the Chinese mainland; • Managers and chief editors of Internet news information service providers must be citizens of the Chinese mainland; • Internet news information service providers must have personnel who have appropriate qualification and professional training; • Internet news information service providers must have sound Internet news information service management systems; 80 Table of Contents • Internet news information service providers must have rigorous information security management systems; • Internet news information service providers must have facilities that are suitable for their proposed services, and must be adequately funded; and • Internet news information service providers may only republish news published by governmental news agencies and must ensure the original sources are traceable.
The News Regulations stipulate that Internet news information services include production, publishing, and republishing services and platforms providing for the dissemination of news over the Internet, and specify that platforms providing for the dissemination of news over the Internet will be required to obtain an Internet news information services permit. 78 Table of Contents Requirements of News Regulations include, among other things, the following: • Internet news information service providers must be entities duly incorporated within the territory of the Chinese mainland; • Managers and chief editors of Internet news information service providers must be citizens of the Chinese mainland; • Internet news information service providers must have personnel who have appropriate qualification and professional training; • Internet news information service providers must have sound Internet news information service management systems; • Internet news information service providers must have rigorous information security management systems; • Internet news information service providers must have facilities that are suitable for their proposed services, and must be adequately funded; and • Internet news information service providers may only republish news published by governmental news agencies and must ensure the original sources are traceable.
On January 15, 2011, the MCT, the MIIT and six other central regulatory authorities in the Chinese mainland jointly issued a circular entitled Implementation of Online Game Monitor System of the Guardians of Minors , or the Monitor System Circular, aiming to provide protection measures to monitor the online game activities of minors and curb addictive online game playing behaviors of minors.
And, after five hours of play, minors receive no experience points. 88 Table of Contents On January 15, 2011, the MCT, the MIIT and six other central regulatory authorities in the Chinese mainland jointly issued a circular entitled Implementation of Online Game Monitor System of the Guardians of Minors , or the Monitor System Circular, aiming to provide protection measures to monitor the online game activities of minors and curb addictive online game playing behaviors of minors.
Since March 2023, we have leased this entire building to third-party tenants. In November 2009, we entered into a contract for the purchase and development of an office building of approximately 41,283 square meters in Beijing to serve as our headquarters, for consideration of approximately $162 million. The office building was placed in service in May 2013.
In November 2009, we entered into a contract for the purchase and development of an office building of approximately 41,283 square meters in Beijing to serve as our headquarters, for consideration of approximately $162 million. The office building was placed in service in May 2013.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Assumptions: The Sohu reporting unit estimated the fair values by using the income approach and the market approach. The income approach considers a number of factors that include expected future cash flows, revenue growth rates, discount rate and profitability. The market approach considers earnings multipliers based on market data of comparable companies engaged in a similar business.
Assumptions: The Sohu reporting unit estimated the fair values by using the income approach and the market approach. The income approach considers a number of factors that include expected future cash flows, revenue growth rates, the discount rate, and profitability. The market approach considers earnings multipliers based on market data of comparable companies engaged in a similar business.
If rental income decreases and/or market yields increase, the fair value of this real estate, as well as the fair value of the Sohu reporting unit, will decrease. The goodwill impairment assessment is sensitive to the estimates related to these factors, and particularly the fair value of this real estate.
If rental income decreases and/or market yields increase, the fair value of this real estate, as well as the fair value of the Sohu reporting unit, will decrease. The goodwill impairment assessment is sensitive to the estimates related to these factors, and particularly the fair value of the real estate.
LIQUIDITY AND CAPITAL RESOURCES Resources Analysis Liquidity Sources and Balances Our principal sources of liquidity are cash and cash equivalents, short-term investments, long-term time deposits, and cash flows generated from our operations. Cash equivalents mainly consist of time deposits with original maturities of three months or less, and notice deposits.
LIQUIDITY AND CAPITAL RESOURCES Resources Analysis Liquidity Sources and Balances Our principal sources of liquidity are cash and cash equivalents, short-term investments, long-term time deposits, and cash flows generated from operations. Cash equivalents mainly consist of time deposits with original maturities of three months or less, and notice deposits.
When one of our estimates of loss severity and recoveries and macroeconomic forecasts decreased/increased by 5% while holding all other estimates constant, there would be no significant impact to our consolidated results of operations. Our estimate of the key assumptions did not change significantly throughout the periods presented.
When one of our estimates of loss severity and recoveries and macroeconomic forecasts decreased or increased by 5% while holding all other estimates constant, there would be no significant impact to our consolidated results of operations. Our estimate of the key assumptions did not change significantly throughout the periods presented.
The ability of Sohu.com Limited’s direct subsidiaries to receive dividends and distributions from our China mainland-based subsidiaries and the VIEs, and the amount of cash available for distribution to, and use by, Sohu.com Limited, are subject to certain restrictions and limitations related to Chinese mainland law and our subsidiary and VIE structure.
The ability of Sohu.com Limited’s direct subsidiaries to receive dividends and distributions from our Chinese mainland-based subsidiaries and the VIEs, and the amount of cash available for distribution to, and use by, Sohu.com Limited, are subject to certain restrictions and limitations related to Chinese mainland law and our subsidiary and VIE structure.
Chinese Mainland Restrictions Related to the VIE Structure A significant portion of our operations is conducted through VIEs, which generate a significant amount of our revenues. As of December 31, 2023, none of the VIEs that we consolidate in our financial statements under U.S. GAAP (ASC 810) held significant cash balances.
Chinese Mainland Restrictions Related to the VIE Structure A significant portion of our operations is conducted through VIEs, which generate a significant amount of our revenues. As of December 31, 2024, none of the VIEs that we consolidate in our financial statements under U.S. GAAP (ASC 810) held significant cash balances.
Based on the annual impairment test conducted as of October 1, 2023, the fair value of the reporting unit exceeded the carrying value, indicating that the goodwill was not impaired. Our estimate of the key assumptions did not change significantly throughout the periods presented.
Based on the annual impairment test conducted as of October 1, 2024, the fair value of the reporting unit exceeded the carrying value, indicating that the goodwill was not impaired. Our estimate of the key assumptions did not change significantly throughout the periods presented.
Expected Credit Losses Nature of estimate: Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” requires us to record the full amount of expected credit losses for the life of a financial asset at the time it is originated or acquired, adjusted for subsequent changes in expected lifetime credit losses, which require earlier recognition of credit losses.
Expected Credit Losses Nature of estimate: Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” requires us to record the full amount of expected credit losses for the life of a financial asset at the time it is originated or acquired, adjusted for subsequent changes in expected lifetime credit losses.
We do not expect any of such restrictions or taxes to have a material impact on our ability to meet our cash obligations.
We do not expect any of such restrictions or limitations to have a material impact on our ability to meet our cash obligations.
In addition, regulatory authorities in the Chinese mainland could impose restrictions on such payments or change the tax rates applicable to such payments. Capital Expenditures Our capital expenditures include the purchase of fixed assets, intangible assets and other assets.
In addition, regulatory authorities in the Chinese mainland could impose restrictions on such payments or change the tax rates applicable to such payments. 123 Table of Contents Capital Expenditures Our capital expenditures include the purchase of fixed assets, intangible assets and other assets.
If we decreased/increased by 5% one of our assumptions relating to these factors while holding all other assumptions constant, the fair value of the Sohu reporting unit would not be significantly impacted and would still be above its carrying value. The market capitalization of the Sohu Group was also considered in determining the reasonableness of estimated fair value.
If one of the assumptions relating to these factors decreased or increased by 5%, while all other assumptions remained constant, the fair value of the Sohu reporting unit would not be significantly impacted and would still be above its carrying value. The market capitalization of the Sohu Group was also considered in determining the reasonableness of estimated fair value.
OVERVIEW We are a leading Chinese online media, video, and game business group providing comprehensive online products and services on PCs and mobile devices in the Chinese mainland. Our businesses are conducted by Sohu and Changyou. Sohu is a leading online media content and services provider. Changyou is a leading online game developer and operator in the Chinese mainland.
OVERVIEW We are a leading Chinese online media platform and game business group providing comprehensive online products and services on PCs and mobile devices in the Chinese mainland. Our businesses are conducted by Sohu and Changyou. Sohu is an online media content and services provider.
(2) Quarterly Aggregate Active Paying Accounts for a given quarter refers to the number of accounts from which game points are used at least once during the quarter. Other Revenues Revenues from other services were $32.3 million for 2023, compared to $45.2 million and $62.4 million, respectively, for 2022 and 2021.
(2) Quarterly Aggregate Active Paying Accounts for a given quarter refers to the number of accounts from which game points are used at least once during the quarter. Other Revenues Revenues from other services were $22.5 million for 2024, compared to $32.3 million and $45.2 million, respectively, for 2023 and 2022.
We do not expect to adopt ASU No. 2023-09 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements.
We do not expect to adopt ASU No. 2024-03 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements.
Revenues from PC games were $368.7 million for 2023, compared to $425.7 million and $469.3 million, respectively, for 2022 and 2021, representing 77%, 73% and 74%, respectively, of Changyou’s online game revenues for the corresponding years. The dominant PC game operated by Changyou is TLBB.
Revenues from PC games were $359.3 million for 2024, compared to $368.7 million and $425.7 million, respectively, for 2023 and 2022, representing 72%, 77% and 73%, respectively, of Changyou’s online game revenues for the corresponding years. The dominant PC game operated by Changyou is TLBB.
As of December 31, 2023, we had obligations to provide, and advertisers had obligations to purchase, advertising services under existing contracts in the amount of $4.8 million that are required to be provided during the year ending December 31, 2024.
As of December 31, 2024, we had obligations to provide, and advertisers had obligations to purchase, advertising services under existing contracts in the amount of $6.3 million that are required to be provided during the year ending December 31, 2025.
While maintaining its core competitiveness in MMORPGs, Changyou is also expanding its game portfolio with additional types of card-based RPGs, sports games, casual games and strategy games.
While maintaining its core competitiveness in MMORPGs, Changyou also plans to expand its game portfolio with additional types of card-based RPGs, sports games, casual games, and strategy games.
Revenues from mobile games were $111.0 million for 2023, compared to $159.7 million and $168.9 million, respectively, for 2022 and 2021. The dominant mobile game operated by Changyou was Legacy TLBB Mobile.
Revenues from mobile games were $143.1 million for 2024, compared to $111.0 million and $159.7 million, respectively, for 2023 and 2022. The dominant mobile game operated by Changyou was Legacy TLBB Mobile.
For 2021, $113.6 million net cash provided by continuing operation activities was primarily attributable to our net income of $69.3 million, adjusted by (i) the add back of non-cash items consisting of $36.0 million of depreciation and amortization expenses, $8.6 million of share-based compensation expense, $8.0 million of allowance for credit losses, $1.8 million of impairment of other intangible assets and other assets, and $0.2 million of impairment of long-term investments, (ii) offset by $6.3 million of investment income from equity investments, $2.5 million of change in fair value of financial instruments, and $0.9 million from disposal of fixed assets.
For 2023, $25.6 million net cash used in continuing operation activities was primarily attributable to our net loss of $66.1 million, adjusted by (i) the add back of non-cash items consisting of $30.2 million of depreciation and amortization expenses, $5.8 million of impairment of other intangible assets and other assets, $0.7 million of share-based compensation expense, and $0.3 million of impairment of long-term investments, (ii) offset by $1.1 million of investment income from long-term investments, $0.5 million from disposal of fixed assets, $0.3 million of allowance for credit losses, and $0.2 million of change in fair value of financial instruments.
Net Cash Provided by/(Used in) Investing Activities For 2023, $291.7 million net cash used in continuing investing activities was primarily attributable to (i) $1.80 billion used in purchase of short-term investments and time deposits, $22.1 million used in the purchase of long-term investment, and $18.4 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.54 billion in proceeds from short-term investments and time deposits, and $3.6 million cash received from other investing activities. 125 Table of Contents For 2022, $232.8 million net cash used in continuing investing activities was primarily attributable to (i) $2.15 billion used in purchase of short-term investments and time deposits, and $23.8 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.94 billion in proceeds from short-term investments and $6.3 million cash received from other investing activities.
For 2023, $291.7 million net cash used in continuing investing activities was primarily attributable to (i) $1.80 billion used in purchase of short-term investments and time deposits, $22.1 million used in the purchase of long-term investment, and $18.4 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.54 billion in proceeds from short-term investments and time deposits, and $3.6 million cash received from other investing activities.
Online Game Revenues Revenues from the online game business were $479.7 million for 2023, compared to $585.4 million and $638.2 million, respectively, for 2022 and 2021.
Online Game Revenues Revenues from the online game business were $502.4 million for 2024, compared to $479.7 million and $585.4 million, respectively, for 2023 and 2022.
The year-on-year decrease in mobile game revenues for 2023 was $48.7 million, mainly due to a natural decline in older games. 117 Table of Contents The following table sets forth certain operating data for Changyou’s PC games and mobile games for the periods indicated: Average Monthly Active Accounts (1) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2021 2.3 2.0 2.1 1.9 2.0 4.6 2.0 2.5 2022 2.0 2.4 2.3 2.0 2.1 2.5 2.3 1.8 2023 2.2 1.6 2.2 1.3 2.2 2.3 2.3 1.7 Quarterly Aggregate Active Paying Accounts (2) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2021 0.9 0.5 0.9 0.5 1.0 1.0 0.9 0.5 2022 1.0 0.5 1.0 0.4 1.0 0.6 0.9 0.4 2023 0.9 0.3 0.9 0.3 1.0 0.5 0.9 0.3 (1) Average Monthly Active Accounts for a given period refers to the number of registered accounts that were logged in to these games at least once during the period.
The following table sets forth certain operating data for Changyou’s PC games and mobile games for the periods indicated: Average Monthly Active Accounts (1) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2022 2.0 2.4 2.3 2.0 2.1 2.5 2.3 1.8 2023 2.2 1.6 2.2 1.3 2.2 2.3 2.3 1.7 2024 2.3 2.8 2.2 4.9 2.2 3.2 2.3 2.6 114 Table of Contents Quarterly Aggregate Active Paying Accounts (2) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2022 1.0 0.5 1.0 0.4 1.0 0.6 0.9 0.4 2023 0.9 0.3 0.9 0.3 1.0 0.5 0.9 0.3 2024 0.9 0.3 0.9 1.1 0.9 1.1 1.0 0.4 (1) Average Monthly Active Accounts for a given period refers to the number of registered accounts that were logged in to these games at least once during the period.
ASU No. 2023-07 requires an enhanced disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, on an annual and interim basis.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)-Improvements to Reportable Segment Disclosures . ASU No. 2023-07 requires an enhanced disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, on an annual and interim basis.
The decrease included a $22.0 million decrease in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $1.1 million decrease in bandwidth service costs and a $0.6 million decrease in tax surcharges. The year-on-year increase in cost of online game revenues for 2022 was $3.4 million.
The increase included a $20.6 million increase in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $1.8 million increase in bandwidth service costs. The year-on-year decrease in cost of online game revenues for 2023 was $26.0 million.
Our Offshore entities may not be able to obtain cash from distributions because our Chinese mainland-based subsidiaries and the VIEs in the Chinese mainland are subject to restrictions imposed by Chinese mainland law on paying such dividends and making other payments,” and “- Dividends we receive from our operating subsidiaries located in the Chinese mainland are subject to Chinese mainland profit appropriation and withholding tax,” See also “Restrictions and Limitations on Cash Available to Sohu.com Limited” below and Item 11 “Quantitative and Qualitative Disclosure About Market Risk - Foreign Currency Exchange Rate Risk.” 124 Table of Contents Cash Generating Ability Our cash flows were summarized below (in thousands): Year Ended December 31, 2021 2022 2023 Net cash provided by/(used in) continuing operating activities $ 113,610 $ 32,242 $ (25,567 ) Net cash used in discontinued operating activities (175,888 ) 0 0 Net cash provided by/(used in) operating activities (62,278 ) 32,242 (25,567 ) Net cash used in continuing investing activities (537,419 ) (232,789 ) (291,665 ) Net cash provided by discontinued investing activities 1,054,148 0 0 Net cash provided by/(used in) investing activities 516,729 (232,789 ) (291,665 ) Net cash used in continuing financing activities (424,968 ) (82,136 ) (6,560 ) Net cash used in discontinued financing activities (9,132 ) 0 0 Net cash used in financing activities (434,100 ) (82,136 ) (6,560 ) Effect of exchange rate change on cash, cash equivalents and restricted cash 20,997 (16,773 ) (11,982 ) Net increase/(decrease) in cash, cash equivalents and restricted cash 41,348 (299,456 ) (335,774 ) Cash, cash equivalents and restricted cash at beginning of period 959,570 1,000,918 701,462 Cash, cash equivalents and restricted cash at end of period $ 1,000,918 $ 701,462 $ 365,688 Cash, cash equivalents and restricted cash of continuing operations, end of year 1,000,918 701,462 365,688 Net Cash Provided by/(Used in) Operating Activities For 2023, $25.6 million net cash used in continuing operation activities was primarily attributable to our net loss of $66.1 million, adjusted by (i) the add back of non-cash items consisting of $30.2 million of depreciation and amortization expenses, $5.8 million of impairment of other intangible assets and other assets, $0.7 million of share-based compensation expense, and $0.3 million of impairment of long-term investments, (ii) offset by $1.1 million of investment income from long-term investments, $0.5 million from disposal of fixed assets, $0.3 million of allowance for credit losses, and $0.2 million of change in fair value of financial instruments.
Our Offshore entities may not be able to obtain cash from distributions because our Chinese mainland-based subsidiaries and the VIEs in the Chinese mainland are subject to restrictions imposed by Chinese mainland law on paying such dividends and making other payments,” and “- Dividends we receive from our operating subsidiaries located in the Chinese mainland are subject to Chinese mainland profit appropriation and withholding tax,” See also “Restrictions and Limitations on Cash Available to Sohu.com Limited” below and Item 11 “Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk.” Cash Generating Ability Our cash flows were summarized below (in thousands): Year Ended December 31, 2022 2023 2024 Net cash provided by/(used in) continuing operating activities $ 32,242 $ (25,567 ) $ (48,018 ) Net cash provided by/(used in) operating activities 32,242 (25,567 ) (48,018 ) Net cash used in continuing investing activities (232,789 ) (291,665 ) (113,360 ) Net cash used in investing activities (232,789 ) (291,665 ) (113,360 ) Net cash used in continuing financing activities (82,136 ) (6,560 ) (40,875 ) Net cash used in financing activities (82,136 ) (6,560 ) (40,875 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (16,773 ) (11,982 ) (3,508 ) Net decrease in cash, cash equivalents and restricted cash (299,456 ) (335,774 ) (205,761 ) Cash, cash equivalents and restricted cash at beginning of period 1,000,918 701,462 365,688 Cash, cash equivalents and restricted cash at end of period $ 701,462 $ 365,688 $ 159,927 Cash, cash equivalents and restricted cash of continuing operations, end of year 701,462 365,688 159,927 121 Table of Contents Net Cash Provided by/(Used in) Operating Activities For 2024, $48.0 million net cash used in continuing operating activities was primarily attributable to our net loss of $100.2 million, adjusted by (i) the add back of non-cash items consisting of $24.7 million of depreciation and amortization expenses, $1.3 million of allowance for credit losses, $0.9 million of impairment of other intangible assets and other assets, and $0.3 million of investment income from long-term investments, (ii) offset by $4.9 million of change in fair value of financial instruments, and $0.3 million from disposal of fixed assets.
We consider an accounting estimate to be critical if: - the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made; and - changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. 114 Table of Contents There are other items within our financial statements that require estimation but are not deemed critical, as defined above.
We consider an accounting estimate to be critical if: - the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made; and - changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Our capital expenditures were $42.2 million, $23.8 million, and $18.4 million, respectively, for the years ended December 31, 2021, 2022 and 2023.
Our capital expenditures were $19.9 million, $18.4 million, and $23.8 million, respectively, for the years ended December 31, 2024, 2023 and 2022.
We conduct an annual impairment test as of October 1 of each year, or more frequently if events or circumstances indicate an impairment may exist. We conduct impairment tests by quantitatively comparing the fair value of the reporting unit to its carrying value.
The goodwill balance associated with the Sohu reporting unit was $36.7 million as of December 31, 2024. We conduct an annual impairment test as of October 1 of each year, or more frequently if events or circumstances indicate an impairment may exist. We conduct impairment tests by quantitatively comparing the fair value of the reporting unit to its carrying value.
Net income/(Loss) attributable to Sohu.com Limited As a result of the foregoing, we had a net loss from continuing operations of $65.8 million attributable to Sohu.com Limited for 2023, compared to net loss of $17.3 million attributable to Sohu.com Limited, and a net income of $69.3 million attributable to Sohu.com Limited, respectively, for 2022 and 2021.
Net income/(Loss) attributable to Sohu.com Limited As a result of the foregoing, we had a net loss from continuing operations of $100.3 million attributable to Sohu.com Limited for 2024, compared to net loss of $65.8 million and $17.3 million attributable to Sohu.com Limited, respectively, for 2023 and 2022. 120 Table of Contents We had net income from discontinued operations of nil attributable to Sohu.com Limited for 2024, compared to net income of $35.4 million and nil attributable to Sohu.com Limited, respectively, for 2023 and 2022.
We have focused our efforts on developing a portfolio of mobile products across our business lines. For Sohu Media portal and Sohu Video, we have continued to refine our flagship Apps and enhance user experience by expanding premium content offerings, upgrading technology and algorithms, and introducing innovative features to meet user demand.
We have focused our efforts on developing a portfolio of mobile products across our business lines. For Sohu, during 2024 we continued to refine our flagship Apps and enhance user experience by expanding premium content offerings, upgrading technology and algorithms, and integrating resources on our platform.
The decrease mainly consisted of a $3.5 million decrease in salary and benefits expenses, a $2.1 million decrease in share-based compensation expense, and a $1.4 million decrease in professional fees. The year-on-year decrease for 2022 was $25.0 million, representing a year-on-year decrease of 30%.
The decrease mainly consisted of a $3.5 million decrease in salary and benefits expenses, a $2.1 million decrease in share-based compensation expense, and a $1.4 million decrease in professional fees.
Our brand advertising gross margin was 20% for 2023, compared to 16% and 26%, respectively, for 2022 and 2021. Cost of Online Game Revenues Cost of online game revenues was $65.0 million for 2023, compared to $91.0 million and $87.6 million, respectively, for 2022 and 2021. The year-on-year decrease in cost of online game revenues for 2023 was $26.0 million.
Our brand advertising gross margin was 9% for 2024, compared to 20% and 16%, respectively, for 2023 and 2022. Cost of Online Game Revenues Cost of online game revenues was $88.5 million for 2024, compared to $65.0 million and $91.0 million, respectively, for 2023 and 2022. The year-on-year increase in cost of online game revenues for 2024 was $23.5 million.
The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this guidance should be applied retrospectively to all prior periods presented. Early adoption is permitted.
The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this guidance should be applied retrospectively to all prior periods presented. Early adoption is permitted. The adoption of this standard did not have a material impact on our consolidated financial statements.
We had net income from discontinued operations of $35.4 million attributable to Sohu.com Limited for 2023, compared to net income of nil and $858.5 million attributable to Sohu.com Limited, respectively, for 2022 and 2021.
We had net income from discontinued operations of nil for 2024, compared to net income of $35.4 million and nil, respectively, for 2023 and 2022.
The year-on-year decrease for 2023 was $12.9 million, which was mainly attributable to a $12.3 million decrease in revenue from Sohu’s paid subscription services, a $1.4 million decrease in Sohu’s interactive broadcasting services, and a $0.8 million increase in Sohu’s revenue sharing from other platforms.
The year-on-year decrease for 2024 was $9.8 million, which was mainly attributable to a $7.1 million decrease in revenue from Sohu’s paid subscription services, and a $1.2 million decrease in Sohu’s revenue sharing from other platforms.
The year-on-year decrease for 2022 was $17.2 million, which was mainly attributable to a $10.1 million decrease in revenue from Sohu’s paid subscription services, a $4.2 million decrease in Sohu’s interactive broadcasting services, and a $2.5 million decrease in Sohu’s revenue sharing from other platforms. 118 Table of Contents Costs and Expenses Cost of Revenues The following table presents our cost of revenues by source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2021 2022 2023 2022 VS 2021 2023 VS 2022 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Cost of revenues: Brand advertising $ 99,522 49 % $ 86,642 45 % $ 71,103 48 % $ (12,880 ) (13 )% $ (15,539 ) (18 )% Online games 87,616 43 % 91,001 48 % 65,029 45 % 3,385 4 % (25,972 ) (29 )% Others 17,533 8 % 13,930 7 % 9,625 7 % (3,603 ) (21 )% (4,305 ) (31 )% Total cost of revenues $ 204,671 100 % $ 191,573 100 % $ 145,757 100 % $ (13,098 ) (6 )% $ (45,816 ) (24 )% 119 Table of Contents Cost of Brand Advertising Revenues Cost of brand advertising revenues was $71.1 million for 2023, compared to $86.6 million and $99.5 million, respectively, for 2022 and 2021.
The year-on-year decrease for 2023 was $12.9 million, which was mainly attributable to a $12.3 million decrease in revenue from Sohu’s paid subscription services, a $1.4 million decrease in Sohu’s interactive broadcasting services, and a $0.8 million increase in Sohu’s revenue sharing from other platforms. 115 Table of Contents Costs and Expenses Cost of Revenues The following table presents our cost of revenues by source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2022 2023 2024 2023 VS 2022 2024 VS 2023 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Cost of revenues: Brand advertising $ 86,642 45 % $ 71,103 48 % $ 66,579 40 % $ (15,539 ) (18 )% $ (4,524 ) (6 )% Online games 91,001 48 % 65,029 45 % 88,495 53 % (25,972 ) (29 )% 23,466 36 % Others 13,930 7 % 9,625 7 % 10,759 7 % (4,305 ) (31 )% 1,134 12 % Total cost of revenues $ 191,573 100 % $ 145,757 100 % $ 165,833 100 % $ (45,816 ) (24 )% $ 20,076 14 % 116 Table of Contents Cost of Brand Advertising Revenues Cost of brand advertising revenues was $66.6 million for 2024, compared to $71.1 million and $86.6 million, respectively, for 2023 and 2022.
The decrease mainly consisted of a $13.3 million decrease in advertising and promotional expenses, offset by a $1.5 million increase in professional fees. The year-on-year increase for 2022 was $42.8 million, representing a year-on-year increase of 23%.
The increase mainly consisted of a $28.1 million increase in advertising and promotional expenses, offset by a $3.2 million decrease in salary and benefits expenses, and a $2.1 million decrease in professional fees. The year-on-year decrease for 2023 was $12.1 million, representing a year-on-year decrease of 5%.
For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2 - Summary of Significant Accounting Policies.” You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report.
For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2 - Summary of Significant Accounting Policies.” You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report. 111 Table of Contents Goodwill Impairment Assessment for the Sohu Reporting Unit Nature of estimate: The Sohu segment has only one reporting unit, which is the Sohu reporting unit.
For 2021, $537.4 million net cash used in continuing investing activities was primarily attributable to (i) $1.22 billion used in purchase of short-term investments and time deposits, $42.2 million used in purchase of fixed assets and intangible assets, and $15.9 million used in the purchase of long-term investments, offset by (ii) $740.7 million in proceeds from short-term investments and $2.5 million cash received from other investing activities.
Net Cash Used in Investing Activities For 2024, $113.4 million net cash used in continuing investing activities was primarily attributable to (i) $1.94 billion used in the purchase of short-term investments and time deposits, and $19.9 million used in the purchase of fixed assets and intangible assets, offset by (ii) $1.84 billion in proceeds from short-term investments and time deposits, and $0.6 million cash received from other investing activities.
The decrease in cash from $0.4 million in working capital items is also included in operating cash flow.
The increase in cash from $30.3 million in working capital items is also included in operating cash flow.
The year-on-year decrease for 2022 was $3.6 million, which was mainly due to a $4.2 million decrease in revenue-sharing payments related to interactive broadcasting services, offset by a $0.6 million increase in revenue-sharing payments related to payment channels. 120 Table of Contents Operating Expenses The following table presents our operating expenses by nature and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2021 2022 2023 2022 VS 2021 2023 VS 2022 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Operating expenses: Product development $ 268,863 50 % $ 260,772 48 % $ 279,842 52 % $ (8,091 ) (3 )% $ 19,070 7 % Sales and marketing 182,690 34 % 225,480 41 % 213,449 39 % 42,790 23 % (12,031 ) (5 )% General and administrative 81,880 16 % 56,920 11 % 48,934 9 % (24,960 ) (30 )% (7,986 ) (14 )% Total operating expenses $ 533,433 100 % $ 543,172 100 % $ 542,225 100 % $ 9,739 2 % $ (947 ) 0 % 121 Table of Contents Product Development Expenses Product development expenses were $279.8 million for 2023, compared to $260.8 million and $268.9 million, respectively, for 2022 and 2021.
The year-on-year decrease for 2023 was $4.3 million, which was mainly due to a $4.6 million decrease in revenue-sharing payments related to payment channels. 117 Table of Contents Operating Expenses The following table presents our operating expenses by nature and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2022 2023 2024 2023 VS 2022 2024 VS 2023 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Operating expenses: Product development $ 260,772 48 % $ 279,842 52 % $ 255,233 47 % $ 19,070 7 % $ (24,609 ) (9 )% Sales and marketing 225,480 41 % 213,449 39 % 235,824 44 % (12,031 ) (5 )% 22,375 10 % General and administrative 56,920 11 % 48,934 9 % 50,910 9 % (7,986 ) (14 )% 1,976 4 % Total operating expenses $ 543,172 100 % $ 542,225 100 % $ 541,967 100 % $ (947 ) 0 % $ (258 ) 0 % 118 Table of Contents Product Development Expenses Product development expenses were $255.2 million for 2024, compared to $279.8 million and $260.8 million, respectively, for 2023 and 2022.
Restrictions and Limitations on Cash Available to Sohu.com Limited To fund any cash requirements it may have, Sohu.com Limited may need to rely on dividends and other distributions on equity paid by our direct subsidiaries, which are all located outside of the Chinese mainland.
For 2022, $82.1 million net cash used in continuing financing activities was used in the repurchase of shares. 122 Table of Contents Restrictions and Limitations on Cash Available to Sohu.com Limited To fund any cash requirements it may have, Sohu.com Limited may need to rely on dividends and other distributions on equity paid by our direct subsidiaries, which are all located outside of the Chinese mainland.
To attract and retain users, we have incurred expenses for content and user acquisition, as well as for promotion of our products and services. We may increase such expenditures in the future.
These events brought together users with common interests to our platform and enhanced vitality and engagement within our user community. To attract and retain users, we have incurred expenses for content and user acquisition, as well as for promotion of our products and services. We may increase such expenditures in the future.
In 2023, TLBB PC generated revenues of $321.4 million, accounting for approximately 67% of Changyou’s online game revenues, approximately 66% of Changyou’s total revenues, and approximately 53% of the Sohu Group’s total revenues. The year-on-year decrease in PC game revenues for 2023 was $57.0 million, mainly due to a natural decline in TLBB PC.
In 2024, TLBB PC generated revenues of $309.2 million, accounting for approximately 62% of Changyou’s online game revenues, approximately 61% of Changyou’s total revenues, and approximately 52% of the Sohu Group’s total revenues. The year-on-year decrease in PC game revenues for 2024 was $9.4 million, mainly due to a natural decline in TLBB PC.
The difference in income tax expense for 2022 compared to 2021 resulted primarily from deferred tax expense of $3.8 million. Net Income/(Loss) As a result of the foregoing, we had a net loss from continuing operations of $66.1 million for 2023, compared to a net loss of $17.3 million, and net income of $69.3 million, respectively, for 2022 and 2021.
Net Income/(Loss) As a result of the foregoing, we had a net loss from continuing operations of $100.2 million for 2024, compared to a net loss of $66.1 million and $17.3 million, respectively, for 2023 and 2022.
The year-on-year decrease for 2022 was $12.9 million, which mainly consisted of a $5.0 million decrease in content and license costs, a $2.6 million decrease in costs incurred for content marketing campaigns, a $2.2 million decrease in depreciation and amortization expenses, and a $1.8 million decrease in salary and benefits expenses.
The year-on-year decrease for 2024 was $4.5 million, which mainly consisted of a $2.4 million decrease in bandwidth service costs, a $1.1 million decrease in costs incurred for content marketing campaigns, and a $1.1 million decrease in salary and benefits expenses.
Sales and Marketing Expenses Sales and marketing expenses were $213.4 million for 2023, compared to $225.5 million and $182.7 million, respectively, for 2022 and 2021. The year-on-year decrease for 2023 was $12.1 million, representing a year-on-year decrease of 5%.
Sales and Marketing Expenses Sales and marketing expenses were $235.8 million for 2024, compared to $213.4 million and $225.5 million, respectively, for 2023 and 2022. The year-on-year increase for 2024 was $22.4 million, representing a year-on-year increase of 10%.
We do not expect to adopt ASU No. 2023-07 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements. Income Taxes (Topic 740). In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)- Improvements to Income Tax Disclosures .
We do not expect to adopt ASU No. 2023-09 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements. Income Statement (Topic 220) . In November 2024, the FASB issued ASU No. 2024-03, Income Statement (Topic 220)-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40).
The average amount spent per advertiser was approximately $189,000, $242,000 and $348,000, respectively, for 2023, 2022 and 2021. Changyou • 17173.com Website Revenues from the 17173.com Website were $5.0 million for 2023, compared to $6.9 million and $10.8 million, respectively, for 2022 and 2021.
The average amount spent per advertiser was approximately $66,000, $56,000 and $61,000, respectively, for 2024, 2023 and 2022. Changyou Revenues from Changyou’s 17173.com Website were $3.8 million for 2024, compared to $5.0 million and $6.9 million, respectively, for 2023 and 2022. The number of advertisers was 62, 60 and 67, respectively, for 2024, 2023 and 2022.
Net Cash Provided by/(Used in) Financing Activities For 2023, $6.6 million net cash used in continuing financing activities was used in repurchase of shares. For 2022, $82.1 million net cash used in continuing financing activities was used in repurchase of shares.
Net Cash Used in Financing Activities For 2024, $40.9 million net cash used in continuing financing activities was used in the repurchase of shares. For 2023, $6.6 million net cash used in continuing financing activities was used in the repurchase of shares.
For the year ended December 31, 2023, our total revenues were approximately $600.7 million, representing a decrease of 18% compared to 2022, and our gross margin increased from 74% to 76%. Our brand advertising business generated revenues of $88.7 million, with a 14% annual decrease, representing 15% of total revenues.
For the year ended December 31, 2024, our total revenues were approximately $598.4 million, stable compared to 2023, and our gross margin decreased from 76% to 72%. Our brand advertising business generated revenues of $73.5 million, with a 17% annual decrease, representing 12% of total revenues.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or product development services with us. 127 Table of Contents IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The accounting standards that we adopted beginning January 1, 2023 did not have a significant impact on our consolidated financial statements.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or product development services with us. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Segment Reporting (Topic 280).
Further, we have continued to host various innovative marketing events, both online and offline, which have not only generated a large amount of premium content but also gained widespread recognition from users. These events demonstrated our competitive advantage and have further consolidated our position as a mainstream media platform.
Further, we have continually innovated our content offerings and combined them to customized brand marketing solutions for advertisers through various events, which have not only generated premium content but also gained recognition from both users and advertisers. These events demonstrated our competitive advantages and consolidated our position as a mainstream media platform.
CONTRACTUAL OBLIGATIONS The following table sets forth our contractual obligations as of December 31, 2023 (in thousands): 2024 2025 2026 2027 2028 Thereafter Total Royalties and expenditures for licensed content of games $ 15,224 1,412 1,059 0 0 0 17,695 Operating lease obligations 4,826 2,357 1,994 0 0 0 9,177 Purchase of content and services 8,029 290 23 0 0 0 8,342 Purchase of bandwidth 7,021 40 14 8 0 0 7,083 Others 295 0 0 0 0 0 295 Total Payments Required $ 35,395 4,099 3,090 8 0 0 42,592 OTHER LONG-TERM LIABILITIES We recorded long-term tax liabilities of $212.9 million, consisting primarily of a $12.9 million in interest on the unrecognized tax benefit related to the Toll Charge, and $200.0 million related to certain business transactions that took place in previous years and management determined may result in additional tax obligations under relevant tax rules.
CONTRACTUAL OBLIGATIONS The following table sets forth our contractual obligations as of December 31, 2024 (in thousands): 2025 2026 2027 2028 2029 Thereafter Total Purchase of content and services 13,033 282 55 0 0 0 13,370 Operating lease obligations 4,364 3,989 113 0 0 0 8,466 Royalties and expenditures for licensed content of games $ 3,978 1,391 695 1,043 0 0 7,107 Purchase of bandwidth 5,191 87 8 0 0 0 5,286 Others 271 0 0 0 0 0 271 Total Payments Required $ 26,837 5,749 871 1,043 0 0 34,500 OTHER LONG-TERM LIABILITIES We recorded long-term tax liabilities of $211.8 million, consisting primarily of a $15.3 million in interest on the unrecognized tax benefit related to the Toll Charge, and $196.5 million related to certain business transactions that took place in previous years and management determined may result in additional tax obligations under relevant tax rules.
Interest Expense Interest expense was nil for 2023, compared to nil and $7.5 million, respectively, for 2022 and 2021. Income Tax Expense Income tax expense was $60.4 million for 2023, compared to $57.9 million and $62.3 million, respectively, for 2022 and 2021.
Interest Income Interest income was $38.6 million for 2024, compared to $45.2 million and $17.3 million, respectively, for 2023 and 2022. Income Tax Expense Income tax expense was $52.1 million for 2024, compared to $60.4 million and $57.9 million, respectively, for 2023 and 2022.
Our online game business generated revenues of $479.7 million, with an 18% annual decrease, representing 80% of total revenues. In 2023, our net loss from continuing operations was $66.1 million, compared to net loss from continuing operations of $17.3 million in 2022.
Our online game business generated revenues of $502.4 million, with a 5% annual increase, representing 84% of total revenues. In 2024, our net loss from continuing operations was $100.2 million, compared to $66.1 million in 2023.
Changes in estimates used in these and other items could have a material impact on our financial statements.
There are other items within our financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.
Our net income from discontinued operations attributable to noncontrolling interest was nil for 2023, compared to net income attributable to noncontrolling interest of nil and $6.5 million, respectively, for 2022 and 2021.
Net Income/(loss) Attributable to Noncontrolling Interest Our net income from continuing operations attributable to noncontrolling interest was $31,000 for 2024, compared to net loss from continuing operations attributable to noncontrolling interest of $265,000, and net income attributable to noncontrolling interest of $2,000, respectively, for 2023 and 2022.
The year-on-year decrease for 2022 was $8.1 million, representing a year-on-year decrease of 3%.
The year-on-year decrease for 2024 was $24.6 million, representing a year-on-year decrease of 9%.
Our online game gross margin was 86% for 2023, compared to 84% and 86%, respectively, for 2022 and 2021. Cost of Other Revenues Cost of other revenues was $9.6 million for 2023, compared to $13.9 million and $17.5 million, respectively, for 2022 and 2021.
Cost of Other Revenues Cost of other revenues was $10.8 million for 2024, compared to $9.6 million and $13.9 million, respectively, for 2023 and 2022.
The historical results of Sogou’s business are reported as “discontinued operations.” Revenues The following table presents our revenues by revenue source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2021 2022 2023 2022 VS 2021 2023 VS 2022 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Revenues: Brand advertising $ 134,967 16 % $ 103,233 14 % $ 88,689 15 % $ (31,734 ) (24 )% $ (14,544 ) (14 )% Online games 638,225 76 % 585,424 80 % 479,697 80 % (52,801 ) (8 )% (105,727 ) (18 )% Others 62,384 8 % 45,215 6 % 32,286 5 % (17,169 ) (28 )% (12,929 ) (29 )% Total revenues $ 835,576 100 % $ 733,872 100 % $ 600,672 100 % $ (101,704 ) (12 )% $ (133,200 ) (18 )% 116 Table of Contents Brand Advertising Revenues Brand advertising revenues were $88.7 million for 2023, compared to $103.2 million and $135.0 million, respectively, for 2022 and 2021.
See “Note 2 - Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for more information regarding expected credit losses. 112 Table of Contents RESULTS OF OPERATIONS Revenues The following table presents our revenues by revenue source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2022 2023 2024 2023 VS 2022 2024 VS 2023 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Revenues: Brand advertising $ 103,233 14 % $ 88,689 15 % $ 73,465 12 % $ (14,544 ) (14 )% $ (15,224 ) (17 )% Online games 585,424 80 % 479,697 80 % 502,389 84 % (105,727 ) (18 )% 22,692 5 % Others 45,215 6 % 32,286 5 % 22,545 4 % (12,929 ) (29 )% (9,741 ) (30 )% Total revenues $ 733,872 100 % $ 600,672 100 % $ 598,399 100 % $ (133,200 ) (18 )% $ (2,273 ) 0 % 113 Table of Contents Brand Advertising Revenues Brand advertising revenues were $73.5 million for 2024, compared to $88.7 million and $103.2 million, respectively, for 2023 and 2022.
The year-on-year decrease for 2023 was $4.3 million, which was mainly due to a $4.6 million decrease in revenue-sharing payments related to payment channels.
The year-on-year increase for 2024 was $1.2 million, which was mainly due to a $3.3 million increase in content and license costs related to paid subscription services, offset by a $1.8 million decrease in revenue-sharing payments related to payment channels.
The increase mainly consisted of a $53.0 million increase in advertising and promotional expenses, offset by a $4.5 million decrease in salary and benefits expenses, a $2.3 million decrease in travel and entertainment expenses, a $1.8 million decrease in content and license costs, and a $0.9 million decrease in facility expenses.
The decrease mainly consisted of an $8.5 million decrease in content and license costs, a $5.5 million decrease in bad debt expenses, a $4.9 million decrease in salary and benefits expenses, a $2.1 million decrease in depreciation and amortization expenses, and a $1.8 million decrease in bandwidth service expenses.
Share-based Compensation Expense Share-based compensation expense was recognized in costs and expenses for the years ended December 31, 2021, 2022 and 2023 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2021 2022 2023 Cost of revenues $ 277 $ 191 $ 17 Product development expenses 3,904 2,026 156 Sales and marketing expenses 166 128 26 General and administrative expenses 4,231 2,594 509 $ 8,578 $ 4,939 $ 708 122 Table of Contents Share-based compensation expense was recognized for share-based awards of Sohu (excluding Fox Video Limited (“Fox Video”)), Changyou, and Fox Video as follows (in thousands): Year Ended December 31, Share-based compensation expense 2021 2022 2023 For Sohu (excluding Fox Video) share-based awards $ 1,849 $ 677 $ 96 For Changyou share-based awards 7,773 4,262 612 For Fox Video share-based awards (1,044 ) 0 0 $ 8,578 $ 4,939 $ 708 The negative amounts in the tables above resulted from re-measured compensation expense based on the then-current fair value of the awards on the reporting date.
Share-based Compensation Expense Share-based compensation expense was recognized in costs and expenses for the years ended December 31, 2022, 2023 and 2024 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2022 2023 2024 Cost of revenues $ 191 $ 17 $ 1 Product development expenses 2,026 156 19 Sales and marketing expenses 128 26 22 General and administrative expenses 2,594 509 (72 ) $ 4,939 $ 708 $ (30 ) 119 Table of Contents Share-based compensation expense was recognized for share-based awards of Sohu and Changyou for the years ended December 31, 2022, 2023 and 2024 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2022 2023 2024 For Sohu share-based awards $ 677 $ 96 $ 73 For Changyou share-based awards 4,262 612 (103 ) $ 4,939 $ 96 $ (30 ) There was no capitalized share-based compensation expense for the years ended December 31, 2022, 2023 and 2024.
As of December 31, 2023, we had accrued deferred tax liabilities in the amount of $253.5 million for withholding taxes associated with dividends paid by Changyou’s Chinese mainland-based WFOEs to Changyou’s Hong Kong subsidiary. 126 Table of Contents Under regulations of the SAFE, the RMB is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside of the Chinese mainland, unless prior approval of the SAFE is obtained and prior registration with the SAFE is made.
Under regulations of the SAFE, the RMB is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside of the Chinese mainland, unless prior approval of the SAFE is obtained and prior registration with the SAFE is made.
We believe our current liquidity and capital resources are sufficient to meet anticipated working capital needs, commitments, capital expenditures, and investment activities for at least the next twelve months. We may, however, require additional cash resources due to changes in business conditions and other future developments, or changes in general economic conditions. See “Item 3.
We may, however, require additional cash resources due to changes in business conditions and other future developments, or changes in general economic conditions. See “Item 3.
Through the operation of Sohu and Changyou, we generate brand advertising revenues, online games revenues and other revenues. Most of our operations are conducted through our Chinese mainland-based subsidiaries and the VIEs that we consolidate under U.S. GAAP (ASC 810).
Through our social features, Sohu also enables users to generate and distribute content, as well as interact with each other on our platform. Changyou is an online game developer and operator. Most of our operations are conducted through our Chinese mainland-based subsidiaries and the VIEs we consolidate under U.S. GAAP (ASC 810).
Going forward, Changyou plans to continue to enhance its capabilities in game design, game technology, and graphic quality; continue to work with third-party developers, which it believes will help improve development efficiencies; and further invest in talent acquisition and development.
Going forward, Changyou plans to continue to enhance its capabilities in game design, game technology, and graphic quality; continue to embrace technological advances, such as artificial intelligence, to improve efficiency; and further invest in team building and talent development.
In 2023, the mobile game Legacy TLBB Mobile generated revenues of $55.4 million, accounting for approximately 12% of Changyou’s online game revenues, approximately 11% of Changyou’s total revenues, and approximately 9% of the Sohu Group’s total revenues.
In 2024, the mobile game Legacy TLBB Mobile generated revenues of $44.4 million, accounting for approximately 9% of Changyou’s online game revenues, approximately 9% of Changyou’s total revenues, and approximately 7% of the Sohu Group’s total revenues. The year-on-year increase in mobile game revenues for 2024 was $32.1 million, mainly due to the revenue contribution from several new games.
See “Item 4. Information on the Company - History and Development of the Company.” Factors and Trends Affecting our Business The range of mobile Internet services continues to expand, reflecting a continual shift in user activity from PCs to mobile devices and an increase in the number of Internet users.
Diluted net loss from continuing operations per share attributable to Sohu.com Limited was $3.13 in 2024, compared to $1.93 in 2023. 110 Table of Contents Factors and Trends Affecting our Business The range of mobile Internet services continues to expand, reflecting a continual shift in user activity from PCs to mobile devices and an increase in the number of Internet users.
There was no capitalized share-based compensation expense for the years ended December 31, 2021, 2022 and 2023. Operating Profit/(Loss) We had an operating loss of $87.3 million for 2023, compared to operating loss of $0.9 million and operating income of $97.5 million, respectively, for 2022 and 2021.
Operating Profit/(Loss) We had an operating loss of $109.4 million for 2024, compared to operating loss of $87.3 million and $0.9 million, respectively, for 2023 and 2022. Other Income/(Expense) Other income was $22.1 million for 2024, compared to $35.7 million and $17.6 million, respectively, for 2023 and 2022.
Other information Sales to our five largest advertising agencies and advertisers comprised approximately 28% of total brand advertising revenues for 2023, compared to 34% and 29%, respectively, for 2022 and 2021. As of December 31, 2023, 2022 and 2021, we recorded $2.7 million, $2.8million and $4.5 million, respectively, of receipts in advance from advertisers.
The average amount spent per advertiser was approximately $61,000, $83,000 and $103,000, respectively, for 2024, 2023 and 2022. Other information Sales to our five largest advertising agencies and advertisers comprised approximately 24% of total brand advertising revenues for 2024, compared to 28% and 34%, respectively, for 2023 and 2022.
As of December 31, 2023, we had cash and cash equivalents of approximately $362.5 million, restricted cash of $3.2 million, short-term investments of $597.8 million, and long-term time deposits of $388.6 million.
As of December 31, 2024, we had cash and cash equivalents of approximately $159.9 million, short-term investments of $744.5 million, and long-term time deposits of $331.3 million. Of our cash and cash equivalents, $60.1 million was held in financial institutions inside the Chinese mainland and $99.8 million was held in financial institutions outside of the Chinese mainland.
General and Administrative Expenses General and administrative expenses were $48.9 million for 2023, compared to $56.9 million and $81.9 million, respectively, for 2022 and 2021. The year-on-year decrease for 2023 was $8.0 million, representing a year-on-year decrease of 14%.
The decrease mainly consisted of a $13.3 million decrease in advertising and promotional expenses, offset by a $1.5 million increase in professional fees. General and Administrative Expenses General and administrative expenses were $50.9 million for 2024, compared to $48.9 million and $56.9 million, respectively, for 2023 and 2022.
During 2023, Changyou adhered to its “Top Games” strategy, kept close track of changing market trends and user demand, prioritized the feedback of target users for the development processes of new games, and continued to optimize and revitalize its old games. It also embraced technological advances, such as artificial intelligence, to increase efficiency in game development.
During 2024, as market competition intensified and user demands increased, Changyou adhered to its “Top Games” strategy, kept close track of changing market trends and user demand, continued to optimize its development process for new games, and refined and revitalized its older games. Changyou also stepped up its efforts to expand international presence.
The increase included a $3.7 million increase in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $2.0 million increase in salary and benefits expenses, offset by a $1.4 million decrease in content and license costs, and a $0.5 million decrease in tax surcharges.
The decrease included a $22.0 million decrease in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $1.1 million decrease in bandwidth service costs and a $0.6 million decrease in tax surcharges. Our online game gross margin was 82% for 2024, compared to 86% and 84%, respectively, for 2023 and 2022.
For 2021, $425.0 million net cash used in continuing financing activities was primarily attributable to (i) $560.6 million used in repayment of loans from banks and $17.4 million used in repurchase of shares, (ii) offset by $153.0 million in proceeds received from bank loans.
For 2022, $232.8 million net cash used in continuing investing activities was primarily attributable to (i) $2.15 billion used in purchase of short-term investments and time deposits, and $23.8 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.94 billion in proceeds from short-term investments and $6.3 million cash received from other investing activities.
We have worked closely with professional media organizations and other content providers on the production of high-quality content while continuing to concentrate on our self-developed video content. We have launched a series of science related live broadcastings, including the highly regarded IPs, which have reinforced our reputation as a leading science and knowledge-based live broadcasting platform.
We continued to work on a series of science-related live broadcasts, including highly regarded IPs, which we believe reinforced our reputation as a leading knowledge and science-based live broadcasting platform. In addition, leveraging the synergy of our product matrix, we continued to integrate our various influential events centered on different verticals, both online and offline.
IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE Segment Reporting (Topic 280) . In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)- Improvements to Reportable Segment Disclosures .
Other accounting standards that we adopted beginning January 1, 2024 did not have a significant impact on our consolidated financial statements. 124 Table of Contents IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE Income Taxes (Topic 740). In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures .
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Diluted net loss from continuing operations per share attributable to Sohu.com Limited was $1.93 in 2023, compared to diluted net loss from continuing operations per share attributable to Sohu.com Limited of $0.50 in 2022. 113 Table of Contents Between our entry into the Tencent/Sohu Sogou Share Purchase Agreement on September 29, 2020 and the completion of the Tencent/Sohu Sogou Share Purchase on September 23, 2021, Sogou, which generated search and search related advertising revenues, met the criteria for discontinued operations.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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The full responsibilities of our Nominating Committee are set forth in its charter, which is posted on our Web site at http://investors.sohu.com/committee-details/nominating-committee It is a policy of our Nominating Committee that candidates for director (i) be determined to have unquestionable integrity and honesty, (ii) have the ability to exercise sound, mature and independent business judgment which is in the best interests of the shareholders as a whole, (iii) have a background and experience in fields which will complement the talents of the other Board members, (iv) have the willingness and capability to take the time to actively participate in Board and committee meetings and related activities, (v) have the ability to work professionally and effectively with other Board members and our management, (vi) have the ability to remain on our Board long enough to make a meaningful contribution and (vii) have no material relationships with competitors or other third parties that could create a reasonable likelihood of a conflict of interest or other legal issues.
The full responsibilities of our Nominating Committee are set forth in its charter, which is posted on our Web site at http://investors.sohu.com/committee-details/nominating-committee 127 Table of Contents It is a policy of our Nominating Committee that candidates for director (i) be determined to have unquestionable integrity and honesty, (ii) have the ability to exercise sound, mature and independent business judgment which is in the best interests of the shareholders as a whole, (iii) have a background and experience in fields which will complement the talents of the other Board members, (iv) have the willingness and capability to take the time to actively participate in Board and committee meetings and related activities, (v) have the ability to work professionally and effectively with other Board members and our management, (vi) have the ability to remain on our Board long enough to make a meaningful contribution and (vii) have no material relationships with competitors or other third parties that could create a reasonable likelihood of a conflict of interest or other legal issues.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of the filing of this annual report.
The maximum number of Changyou Class A ordinary shares issuable under the Changyou 2014 Share Incentive Plan is 6,000,000 and the maximum number of Changyou’s Class A ordinary shares issuable under the Changyou 2019 Share Incentive Plan is 3,000,000.
The maximum number of Changyou Class A ordinary shares issuable under the Changyou 2014 Share Incentive Plan was 6,000,000 and the maximum number of Changyou’s Class A ordinary shares issuable under the Changyou 2019 Share Incentive Plan is 3,000,000.
Chen worked with Fujian Shi Da Computer Group as a software engineer and project manager, and later as the Director of the Technology Department of the Shanghai branch office. Mr. Dewen Chen received a bachelor’s degree in Computer Engineering from Xi’an Jiaotong University. Joanna Lv has been our Chief Financial Officer since January 27, 2018. Ms.
Chen worked with Fujian Shi Da Computer Group as a software engineer and project manager, and later as the Director of the Technology Department of the Shanghai branch office. Mr. Dewen Chen received a bachelor’s degree in Computer Engineering from Xi’an Jiaotong University. 125 Table of Contents Joanna Lv has been our Chief Financial Officer since January 27, 2018. Ms.
Charles Zhang has a Ph.D. in experimental physics from MIT and a Bachelor of Science degree from Tsinghua University. 128 Table of Contents Dewen Chen is the Chief Executive Officer of Changyou and was one of the principal founders of Changyou’s online game business. Mr. Chen was named as one of our executive officers effective November 1, 2016. Mr.
Charles Zhang has a Ph.D. in experimental physics from MIT and a Bachelor of Science degree from Tsinghua University. Dewen Chen is the Chief Executive Officer of Changyou and was one of the principal founders of Changyou’s online game business. Mr. Chen was named as one of our executive officers effective November 1, 2016. Mr.
Our directors currently consist of Dr. Charles Zhang, Zhonghan Deng, and Dave De Yang, whose terms will expire at our 2024 annual general meeting of shareholders, and Charles Huang, Dave Qi, and Shi Wang, whose terms will expire at our 2025 annual meeting of shareholders.
Our directors currently consist of Dr. Charles Zhang, Zhonghan Deng, and Dave De Yang, whose terms will expire at our 2026 annual general meeting of shareholders, and Charles Huang, Dave Qi, and Shi Wang, whose terms will expire at our 2025 annual meeting of shareholders.
Charles Zhang, have service contracts that provide for benefits upon termination of employment. 132 Table of Contents Employment Agreements with Executive Officers Employment Agreements with Dr. Charles Zhang, Ms. Joanna Lv and Mr. Dewen Chen . We have entered into a three-year employment agreement with our Chief Executive Officer, Dr.
Charles Zhang, have service contracts that provide for benefits upon termination of employment. Employment Agreements with Executive Officers Employment Agreements with Dr. Charles Zhang, Ms. Joanna Lv and Mr. Dewen Chen . We have entered into a three-year employment agreement with our Chief Executive Officer, Dr. Charles Zhang, and a three-year employment agreement with our Chief Financial Officer, Ms.
Awards Granted under Changyou 2019 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Dewen Chen 1,238,774 (1) $ 0.01 8/26/2019 9/30/2029 (1) Consists of options, granted on August 26, 2019 and effective as of October 1, 2019, all of which options are vested as of February 29, 2024.
Awards Granted under Changyou 2019 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Dewen Chen 1,238,774 (1) $ 0.01 8/26/2019 9/30/2029 (1) Consists of options, granted on August 26, 2019 and effective as of October 1, 2019, all of which options were vested as of February 21, 2025.
Changyou Share Incentive Plan Changyou adopted a share incentive plan in June 2014 (the “Changyou 2014 Share Incentive Plan”) that will terminate in June 2024, and adopted a share incentive plan in August 2019 (the “Changyou 2019 Share Incentive Plan”) that will terminate in August 2029 (the Changyou 2019 Share Incentive Plan and the Changyou 2014 Share Incentive Plan together, the “Changyou Share Incentive Plans”).
Changyou also adopted a share incentive plan in August 2019 (the “Changyou 2019 Share Incentive Plan”) that will terminate in August 2029 (the Changyou 2019 Share Incentive Plan and the Changyou 2014 Share Incentive Plan together, the “Changyou Share Incentive Plans”).
Dave Qi, Dr. Zhonghan Deng and Mr. Dave De Yang, who are each independent as that term is defined in Rule 10A-3 under the Exchange Act and Rule 5605(a)(2) of the Nasdaq Listing Rules. Our Board has determined that Dr.
Committees of the Board of Directors Audit Committee The members of our Audit Committee currently are Dr. Dave Qi, Dr. Zhonghan Deng and Mr. Dave De Yang, who are each independent as that term is defined in Rule 10A-3 under the Exchange Act and Rule 5605(a)(2) of the Nasdaq Listing Rules. Our Board has determined that Dr.
For more information about the classification of our Board of Directors, see “- Board of Directors.” Officers are elected by and serve at the discretion of the Board of Directors. Compensation of Executive Officers and Directors During the year ended December 31, 2023, we paid an aggregate of approximately $3.0 million in cash compensation to our executive officers.
For more information about the classification of our Board of Directors, see “- Board of Directors.” Officers are elected by and serve at the discretion of the Board of Directors. Compensation of Executive Officers and Directors During the year ended December 31, 2024, we paid an aggregate of approximately $5.2 million in cash compensation to our executive officers.
We paid an aggregate of approximately $0.58 million in cash compensation to our directors other than Dr. Charles Zhang. In 2023, the total compensation expense for our non-executive directors and executive officers recorded in our consolidated statements of comprehensive income was $5.4 million. None of our directors, other than Dr.
We paid an aggregate of approximately $0.58 million in cash compensation to our directors other than Dr. Charles Zhang. In 2024, the total compensation expense for our non-executive directors and executive officers recorded in our consolidated statements of comprehensive income was $6.7 million. None of our directors, other than Dr.
Qi has a Ph.D. in accounting from the Eli Broad Graduate School of management of Michigan State University, a Master of Business Administration from the University of Hawaii at Manoa and a Bachelor of Science and a Bachelor of Arts degree from Fudan University. Dr.
Qi has a Ph.D. in accounting from the Eli Broad Graduate School of management of Michigan State University, a Master of Business Administration from the University of Hawaii at Manoa and a Bachelor of Science and a Bachelor of Arts degree from Fudan University. Dr. Dave Qi is currently a member of the American Accounting Association. Mr.
Awards Granted under Sohu 2018 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Charles Zhang 75,000 (1) $ 0.001 2/16/2015 2/15/2025 Charles Zhang 70,000 (2) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 7,500 (3) $ 0.001 2/16/2015 2/15/2025 Joanna Lv 40,000 (4) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 10,000 (5) $ 0.001 9/1/2020 8/31/2030 (1) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options are vested and exercisable as of February 29, 2024.
Awards Granted under Sohu 2018 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Charles Zhang 70,000 (1) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 40,000 (1) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 10,000 (1) $ 0.001 9/1/2020 8/31/2030 (1) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options were vested and exercisable as of February 21, 2025.
Directors and Executive Officers Age Position Charles Zhang 59 Chairman of the Board and Chief Executive Officer Dewen Chen 48 Chief Executive Officer of Changyou Joanna Lv 53 Chief Financial Officer Charles Huang 54 Director Zhonghan Deng (1) (2) (3) 56 Independent Director Dave De Yang (1) 58 Independent Director Dave Qi (1) (2) (3) 60 Independent Director Shi Wang (3) 73 Independent Director (1) Member of the Audit Committee of our Board of Directors.
Directors and Executive Officers Age Position Charles Zhang 60 Chairman of the Board and Chief Executive Officer Dewen Chen 49 Chief Executive Officer of Changyou Joanna Lv 54 Chief Financial Officer Charles Huang 55 Director Zhonghan Deng (1) (2) (3) 57 Independent Director Dave De Yang (1) 59 Independent Director Dave Qi (1) (2) (3) 61 Independent Director Shi Wang (3) 74 Independent Director (1) Member of the Audit Committee of our Board of Directors.
Charles Zhang, and a three-year employment agreement with our Chief Financial Officer, Ms. Joanna Lv, and Changyou has entered into an employment agreement with Mr. Dewen Chen, Changyou’s Chief Executive Officers. Under these agreements we or Changyou may terminate Dr. Zhang’s, Ms. Lv’s or Mr.
Joanna Lv, and Changyou has entered into an employment agreement with Mr. Dewen Chen, Changyou’s Chief Executive Officers. Under these agreements we or Changyou may terminate Dr. Zhang’s, Ms. Lv’s or Mr.
Board of Directors Our Board of Directors currently consists of six directors and is divided into two classes consisting of three directors each, with one class of directors being elected by the holders of our ordinary shares at each annual general meeting of shareholders and holding office for staggered two-year terms, with the term of one of the classes expiring at each annual general meeting.
Shi Wang also serves as the Chairman of the Board of Directors of Destone Acquisition Corp. 126 Table of Contents Board of Directors Our Board of Directors currently consists of six directors and is divided into two classes consisting of three directors each, with one class of directors being elected by the holders of our ordinary shares at each annual general meeting of shareholders and holding office for staggered two-year terms, with the term of one of the classes expiring at each annual general meeting.
We or Changyou may also terminate our employment agreements with Dr. Zhang, Ms. Lv or Mr. Chen without cause upon thirty days’ advance written notice. In such case of termination by us and also in a case where Dr. Zhang, Ms. Lv or Mr.
Zhang, Ms. Lv or Mr. Chen without cause upon thirty days’ advance written notice. In such case of termination by us and also in a case where Dr. Zhang, Ms. Lv or Mr.
In any such case, such officer will not be entitled to receive payment of any severance benefits or other amounts by reason of termination other than accrued salary and vacation through the date of termination and such officer’s right to all other benefits will terminate, except as required by applicable law.
In any such case, such officer will not be entitled to receive payment of any severance benefits or other amounts by reason of termination other than accrued salary and vacation through the date of termination and such officer’s right to all other benefits will terminate, except as required by applicable law. 128 Table of Contents We or Changyou may also terminate our employment agreements with Dr.
Upon the dissolution of Sohu.com Inc. on May 31, 2018, we assumed all then existing obligations of Sohu.com Inc. with respect to equity incentive awards that had been granted under Sohu 2010 Stock Incentive Plan and then remained outstanding, and such awards were converted into the right to receive upon exercise or settlement our ordinary shares under the Sohu 2018 Share Incentive Plan rather than shares of the common stock of Sohu.com Inc., subject to the other terms of such outstanding awards.
Upon the dissolution of Sohu.com Inc. on May 31, 2018, we assumed all then existing obligations of Sohu.com Inc. with respect to equity incentive awards that had been granted under Sohu 2010 Stock Incentive Plan and then remained outstanding, and such awards were converted into the right to receive upon exercise or settlement our ordinary shares under the Sohu 2018 Share Incentive Plan rather than shares of the common stock of Sohu.com Inc., subject to the other terms of such outstanding awards. 129 Table of Contents Changyou Share Incentive Plan Changyou adopted a share incentive plan in June 2014 (the “Changyou 2014 Share Incentive Plan”), which expired in June 2024 and is no longer available for granting new share-based awards.
Share incentive awards that were granted, or may be granted, under the Sohu 2018 Share Incentive Plan include, among other forms, options, restricted share units and restricted shares, and the maximum term of any share incentive award granted is ten years from the grant date. 133 Table of Contents Our Compensation Committee, or our full Board of Directors in the absence of such a committee, administers the Sohu 2018 Share Incentive Plan, and determines the terms and conditions of awards under the Sohu 2018 Share Incentive Plans.
Share incentive awards that were granted, or may be granted, under the Sohu 2018 Share Incentive Plan include, among other forms, options, restricted share units and restricted shares, and the maximum term of any share incentive award granted is ten years from the grant date.
The full responsibilities of our Compensation Committee are set forth in its charter, which is posted on our Web site at http://investors.sohu.com/committee-details/compensation-committee 131 Table of Contents Nominating Committee The members of our Nominating Committee currently are Dr. Dave Qi, Mr. Shi Wang and Dr.
The full responsibilities of our Compensation Committee are set forth in its charter, which is posted on our Web site at http://investors.sohu.com/committee-details/compensation-committee Nominating Committee The members of our Nominating Committee currently are Dr. Dave Qi, Mr. Shi Wang and Dr. Zhonghan Deng, who are each independent as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules.
Shi Wang founded the Shenzhen Exhibition Center of Modern Science and Education Equipment, which is the predecessor of Vanke. Mr. Shi Wang is the Executive Manager of the China Real Estate Association and is Deputy Director of the City Housing Development Council of the China Real Estate Association. Mr.
Shi Wang is the Executive Manager of the China Real Estate Association and is Deputy Director of the City Housing Development Council of the China Real Estate Association. Mr.
As of December 31, 2022, options for the purchase of 4,972,800 Fox Video ordinary shares had vested. 134 Table of Contents Grants of Shares and Options to Directors and Executive Officers The following tables set forth summaries of all outstanding equity awards granted by us to, and held by each of our directors and executive officers as of February 29, 2024.
Grants of Shares and Options to Directors and Executive Officers The following tables set forth summaries of all outstanding equity awards granted by us to, and held by each of our directors and executive officers as of February 21, 2025.
Most of these awards vest over a period of four years. 135 Table of Contents Share Ownership Refer to “ Item 7. Major Shareholders and Related Party Transactions ” below for a description of the share ownership of our directors and senior executive officers.
Major Shareholders and Related Party Transactions ” below for a description of the share ownership of our directors and senior executive officers.
Dave Qi is currently a member of the American Accounting Association. 129 Table of Contents Mr. Shi Wang is the Honorary Chairman of the Board of Directors of Vanke, of which he also served as General Manager from 1991 to 1999. In 1984, Mr.
Shi Wang is the Honorary Chairman of the Board of Directors of Vanke, of which he also served as General Manager from 1991 to 1999. In 1984 Mr. Shi Wang founded the Shenzhen Exhibition Center of Modern Science and Education Equipment, which is the predecessor of Vanke. Mr.
We have entered into standard employment agreements with our employees through our subsidiaries and the VIEs. Sohu’s employees have entered into confidentiality, non-competition and non-solicitation agreements with Sohu. Changyou’s employees have entered into confidentiality agreements with Changyou. A number of our employees hold share-based awards granted by Sohu and Changyou, which provide additional financial incentives to them.
Changyou’s employees have entered into confidentiality agreements with Changyou. A number of our employees hold share-based awards granted by Sohu and Changyou, which provide additional financial incentives to them. Most of these awards vest over a period of four years. 130 Table of Contents Share Ownership Refer to “ Item 7.
As a result of the dissolution of Fox Video on March 9, 2023, there are no longer any options for the purchase of Fox Video ordinary shares. Employees As of December 31, 2023, we had approximately 4,700 employees, including 2,800 employees for Sohu and 1,900 employees for Changyou. None of our personnel are represented under collective bargaining agreements.
Employees As of December 31, 2024, we had approximately 4,300 employees, including 2,500 employees for Sohu and 1,800 employees for Changyou. None of our personnel are represented under collective bargaining agreements. We have entered into standard employment agreements with our employees through our subsidiaries and the VIEs. Sohu’s employees have entered into confidentiality, non-competition and non-solicitation agreements with Sohu.
Removed
Shi Wang also serves as the Chairman of the Board of Directors of Destone Acquisition Corp.
Added
Our Compensation Committee, or our full Board of Directors in the absence of such a committee, administers the Sohu 2018 Share Incentive Plan, and determines the terms and conditions of awards under the Sohu 2018 Share Incentive Plans.
Removed
Board Diversity Disclosure Board Diversity Matrix The following table provides the diversity statistics of our Board of Directors required by Rule 5606 of the Nasdaq Listing Rules: Board Diversity Matrix (As of February 29, 2024) Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 6 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Disclosure Pursuant to Rule 5605(f)(3) of the Nasdaq Listing Rules Rule 5605(f)(2)(B) of the Nasdaq Listing Rules requires us to have, or to explain why we do not have, at least two members of our Board of Directors who are “Diverse” directors, at least one of whom self-identifies as “Female,” subject to transition periods specified by Rule 5605(f)(7) of the Nasdaq Listing Rules.
Removed
For purposes of Rule 5605(f)(2)(B), the term “Diverse” means an individual who self-identifies as one or more of Female, LGBTQ+, or an underrepresented individual based on national, racial, ethnic, indigenous, cultural, religious or linguistic identity in the country of our principal executive offices; and the term “Female” means an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.
Removed
Rule 5605(f)(7) of the Nasdaq Listing Rules requires us to have, or explain why we do not have, (i) by December 31, 2023, at least one Diverse director and (ii) by December 31, 2025, at least two Diverse directors, at least one of whom self-identifies as Female. 130 Table of Contents As of the date of this annual report, our Board of Directors has determined that we will satisfy the requirements of Rule 5605(f)(2)(B) of the Nasdaq Listing Rules by explaining why we did not have by December 31, 2023, and currently expect that we will not have by December 31, 2025, any Diverse directors.
Removed
We acknowledge and support the general principles behind the diversity objectives set forth in Rule 5606(f)(2)(B) of the Nasdaq Listing Rules.
Removed
However, we believe that, for business reasons, it would not be appropriate for us to seek to change the current composition of our Board of Directors for the purpose of meeting those objectives, in view of the current state of our business and the competitive environment we face.
Removed
Competition for Internet services in the Chinese mainland market in which we operate has become increasingly intense and challenging.
Removed
In addition, we have faced in the past few years, and may continue to face in the future, significant uncertainties due to the volatility of the macroeconomic environment in the Chinese mainland and global geopolitical tensions on the Chinese economy in general, and on our business operations in particular.
Removed
Accordingly, we believe that maintaining a stable and efficient Board of Directors is critical for us to meet these challenges and ensure our long-term success. We believe that our current corporate governance structure, in particular as to the composition of our Board of Directors, is suitable for the current scale of and goals for our business and operations.
Removed
All members of our Board of Directors have served as our directors for a number of years and are familiar with our company’s history and business operations; provide us with a variety of personal, professional and industry backgrounds, with appropriate experience and skill sets for a business enterprise such as ours; and have track records over the years of having made sound business decisions that have served the best interests of our company and shareholders.
Removed
We intend to continually assess our industry and the status of our business and may decide in the future, should future circumstances make it appropriate, to seek to meet the diversity objectives contemplated by Rule 5606(f)(2)(B) of the Nasdaq Listing Rules. Committees of the Board of Directors Audit Committee The members of our Audit Committee currently are Dr.
Removed
Zhonghan Deng, who are each independent as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules.
Removed
Fox Video Share Incentive Plan On January 4, 2012, Fox Video, a Cayman Islands company that was wholly-owned by Sohu.com Limited and before June 16, 2022 was the Offshore holding entity of our online video business, adopted a 2011 Share Incentive Plan (the “Fox Video Share Incentive Plan,” which was referred to in our previous annual reports on Form 20-F as the “Sohu Video Share Incentive Plan”).
Removed
The Fox Video Share Incentive Plan provided for the issuance of up to 25,000,000 ordinary shares of Fox Video (representing approximately 10% of the outstanding Fox Video ordinary shares on a fully-diluted basis) to management and key employees of our online video business and to Sohu management.
Removed
The maximum term of any share-based award granted under the Fox Video Share Incentive Plan was ten years from the grant date. The Fox Video Share Incentive Plan expired on January 4, 2022.
Removed
On June 16, 2022, Fox Video (HK) Limited (“Video HK”), a wholly-owned subsidiary of Fox Video, transferred all of its equity interests in Video Tianjin to AmazGame and Fox Video was dissolved on March 9, 2023.
Removed
As a result, Fox Video is no longer the Offshore holding entity of our online video business and there are no longer any options for the purchase of Fox Video ordinary shares under the Fox Video Share Incentive Plan.
Removed
As of December 31, 2022, grants of options for the purchase of 16,368,200 ordinary shares of Fox Video had been contractually made and were subject to vesting in four equal installments, with each installment vesting upon a service period requirement, as well as specified performance targets for the corresponding period, being met.
Removed
(2) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options are vested and exercisable as of February 29, 2024. (3) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options are vested and exercisable as of February 29, 2024.
Removed
(4) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options are vested and exercisable as of February 29, 2024. (5) Consists of options to purchase our ordinary shares at a nominal exercise price, of which options for the purchase of 7,500 ordinary shares are vested and exercisable as of February 29, 2024.
Removed
Awards Granted under Fox Video Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Joanna Lv 110,000 (1) $ 0.01 1/4/2012 1/3/2022 (1) Consisted of options to purchase Fox Video ordinary shares at a nominal exercise price, vesting in equal annual installments over a four-year service requirement period, but with vesting for each year also subject to the achievement of annual performance milestones related to Fox Video.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

28 edited+2 added−2 removed29 unchanged
Operating and Financial Review and Prospects - Liquidity and Capital Resources - Restrictions and Limitations on Cash Available to Sohu.com Limited - Chinese Mainland Restrictions Related to Our VIE Structure.” The following is a summary of the material service contracts currently in effect between our Chinese mainland subsidiaries and certain of the VIEs that we consolidate: Exclusive technology consulting and service agreement between Sohu Era and Sohu Internet.
Operating and Financial Review and Prospects - Liquidity and Capital Resources - Restrictions and Limitations on Cash Available to Sohu.com Limited - Chinese Mainland Restrictions Related to the VIE Structure.” The following is a summary of the material service contracts currently in effect between our Chinese mainland subsidiaries and certain of the VIEs that we consolidate: Exclusive technology consulting and service agreement between Sohu Era and Sohu Internet.
The loan arrangements expired on December 31, 2020 and no new supplemental agreements were signed. In May 2021, Changyou notified Fox Financial of Changyou’s intention to exercise its rights under the supplemental agreement by applying the security deposit to repay the RMB-denominated loan principal and corresponding interest owed by Fox Financial to Changyou.
The loan arrangements expired on December 31, 2020 and no new supplemental agreements were signed. In May 2021 and in March 2024, Changyou notified Fox Financial of Changyou’s intention to exercise its rights under the supplemental agreement by applying the security deposit to repay the RMB-denominated loan principal and corresponding interest owed by Fox Financial to Changyou.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of February 29, 2024 by (i) each person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act known by us to be the beneficial owner of more than 5% of our ordinary share (assuming conversion of all outstanding exercisable options and warrants held by that person), (ii) each current director, (iii) each named executive officer and (iv) all of our current directors and named executive officers as a group.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of February 21, 2025 by (i) each person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act known by us to be the beneficial owner of more than 5% of our ordinary share (assuming conversion of all outstanding exercisable options and warrants held by that person), (ii) each current director, (iii) each named executive officer and (iv) all of our current directors and named executive officers as a group.
Under these supplemental agreements, if Fox Financial fails to repay the RMB-denominated loan principal and corresponding interest owed to Changyou, Changyou will have the right to apply the amount of a security deposit, consisting of the outstanding U.S. dollar-denominated loan principal and corresponding interest owed by Changyou to Fox Financial, to repay the RMB-denominated loan principal and interest owed by Fox Financial to Changyou, and vice versa.
If Fox Financial fails to repay the RMB-denominated loan principal and corresponding interest owed to Changyou, Changyou will have the right to apply the amount of a security deposit, consisting of the outstanding U.S. dollar-denominated loan principal and corresponding interest owed by Changyou to Fox Financial, to repay the RMB-denominated loan principal and interest owed by Fox Financial to Changyou, and vice versa.
In connection with such loan arrangements, we recorded in our audited consolidated balance sheets as of December 31, 2023 loans receivable from Fox Financial in a total amount of $33.7 million as prepaid and other current assets, and loans payable to Fox Financial in a total amount of $34.1 million as other short-term liabilities. 137 Table of Contents Transactions with Vanke Co., Ltd.
In connection with such loan arrangements, we recorded in our audited consolidated balance sheets as of December 31, 2024 loans receivable from Fox Financial in a total amount of $33.2 million as prepaid and other current assets, and loans payable to Fox Financial in a total amount of $34.1 million as other short-term liabilities. 132 Table of Contents Transactions with Vanke Co., Ltd.
The number of shares beneficially owned by a person includes the number of ordinary shares subject to options or restricted stock units held by that person that are currently exercisable or settleable or that are exercisable or settleable within 60 days of February 29, 2024.
The number of shares beneficially owned by a person includes the number of ordinary shares subject to options or restricted stock units held by that person that are currently exercisable or settleable or that are exercisable or settleable within 60 days of February 21, 2025.
(2) Includes (i) 145,000 ordinary shares subject to options exercisable within 60 days of February 29, 2024 and (ii) 11,048,400 ordinary shares beneficially owned by Photon Group Limited. Dr. Charles Zhang is a Director of Photon Group Limited, and may be deemed to be a beneficial owner of shares owned by it. Dr.
(2) Includes (i) 70,000 ordinary shares subject to options exercisable within 60 days of February 21, 2025 and (ii) 11,048,400 ordinary shares beneficially owned by Photon Group Limited. Dr. Charles Zhang is a Director of Photon Group Limited, and may be deemed to be a beneficial owner of shares owned by it. Dr.
In 2023, we paid $218,256 to Deeprock Management Consultancy (Shenzhen) Co., Ltd. for services it provided to us. Mr. Shi Wang, one of our directors, holds 99% of the outstanding shares of Deeprock Management Consultancy (Shenzhen) Co., Ltd.
In 2023 and 2024, we paid $218,256 and $14,088, respectively, to Deeprock Management Consultancy (Shenzhen) Co., Ltd. for services it provided to us. Mr. Shi Wang, one of our directors, holds 99% of the outstanding shares of Deeprock Management Consultancy (Shenzhen) Co., Ltd.
In 2021, 2022 and 2023, Vanke Co., Ltd. purchased $173,276, $139,428 and $208,092, respectively, in advertising services from us. Mr. Shi Wang, one of our directors, is the Honorary Chairman of the Board of Vanke Co., Ltd. Transactions with Deeprock Management Consultancy (Shenzhen) Co., Ltd.
In 2022, 2023 and 2024, Vanke Co., Ltd. purchased $139,428, $208,092 and $75,982, respectively, in advertising services from us. Mr. Shi Wang, one of our directors, is the Honorary Chairman of the Board of Vanke Co., Ltd. Transactions with Deeprock Management Consultancy (Shenzhen) Co., Ltd.
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Class (1) Charles Zhang 11,462,100 (2) 34.41 % Charles Huang (3) 76,265 * Shi Wang (4) 34,132 * Dave Qi (5) 28,940 * Zhonghan Deng (6) 5,878 * Dave De Yang (7) — — Joanna Lv 58,000 (8) * Dewen Chen (9) — — All directors, nominees and executive officers as a group (8 persons) 11,665,315 (10) 34.96 % Photon Group Limited (11) 11,048,400 33.31 % Macquarie Investment Management Business Trust (12) 3,429,040 10.16 % * Less than 1%.
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Class (1) Charles Zhang 11,462,100 (2) 38.59 % Charles Huang (3) 76,265 * Shi Wang (4) 34,132 * Dave Qi (5) 28,940 * Zhonghan Deng (6) 5,878 * Dave De Yang (7) — — Joanna Lv 58,637 (8) * Dewen Chen (9) — — All directors, nominees and executive officers as a group (8 persons) 11,665,952 (10) 39.21 % Photon Group Limited (11) 11,048,400 37.28 % Macquarie Investment Management Business Trust (12) 3,429,040 10.16 % * Less than 1%.
GAAP (ASC 810)) as would ownership of these businesses; and the contracts may be difficult to enforce” and “- A failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them could have an adverse effect on our business and financial condition.” The following is a summary of the agreements currently in effect between these principal Chinese mainland subsidiaries and principal VIEs: Agreements between Subsidiaries, Consolidated VIEs and Nominee Shareholders Loan and share pledge agreement between Sohu Media and the shareholders of High Century: The agreement provides for loans to the shareholders of High Century for them to make contributions to the registered capital of High Century in exchange for the equity interests in High Century, and the shareholders pledge those equity interests to Sohu Media as security for the loans.
GAAP (ASC 810)) as would ownership of these businesses; and the contracts may be difficult to enforce” and “- A failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them could have an adverse effect on our business and financial condition.” The following is a summary of the agreements currently in effect between these principal Chinese mainland subsidiaries and principal VIEs: Agreements between Subsidiaries, Consolidated VIEs and Nominee Shareholders Loan and share pledge agreement between Sohu Media and the shareholders of High Century.
Each agreement terminates only when AmazGame, Gamespace or Changyou Chuangxiang is dissolved. 139 Table of Contents Services and maintenance agreements between AmazGame and Gamease, between Gamespace and Guanyou Gamespace, and between Changyou Chuangxiang and Gamease.
Each agreement terminates only when AmazGame, Gamespace or Changyou Chuangxiang is dissolved. Services and maintenance agreements between AmazGame and Gamease, between Gamespace and Guanyou Gamespace, and between Changyou Chuangxiang and Gamease.
If the shareholders breach their obligations under any VIE-related agreements (Gamease’s or Guanyou Gamespace’s breach of any of its obligations under the various applicable VIE-related agreements will be treated as its shareholder’s breach of its obligations), including the equity pledge agreements, AmazGame and Gamespace are entitled to exercise their rights as the beneficiaries under the applicable equity pledge agreements, including all rights the respective shareholders have as shareholders of Gamease or Guanyou Gamespace.
If the shareholders breach their obligations under any VIE-related agreements (Gamease’s or Guanyou Gamespace’s breach of any of its obligations under the various applicable VIE-related agreements will be treated as its shareholder’s breach of its obligations), including the equity pledge agreements, AmazGame and Gamespace are entitled to exercise their rights as the beneficiaries under the applicable equity pledge agreements, including all rights the respective shareholders have as shareholders of Gamease or Guanyou Gamespace. 133 Table of Contents Equity interest purchase right agreements among AmazGame, Gamease and the sole shareholder of Gamease and among Gamespace, Guanyou Gamespace and the sole shareholder of Guanyou Gamespace.
Loan and share pledge agreement between Sohu Focus (HK) Limited (“Focus HK”) and the shareholders of Heng Da Yi Tong: The agreement provides for loans to the shareholders of Heng Da Yi Tong for them to make contributions to the registered capital of Heng Da Yi Tong in exchange for the equity interests in Heng Da Yi Tong, and the shareholders pledge those equity interests to Focus HK as security for the loans.
The agreement provides for loans to the shareholders of Heng Da Yi Tong for them to make contributions to the registered capital of Heng Da Yi Tong in exchange for the equity interests in Heng Da Yi Tong, and the shareholders pledge those equity interests to Focus HK as security for the loans.
As of the date of this annual report, Changyou has not received any response from Fox Financial and accordingly, with an abundance of caution, has not so applied any of the security deposit.
As of the date of the filing of this annual report, Changyou has not received any response from Fox Financial and has not so applied any of the security deposit.
Pursuant to the agreement, the shareholders executed in blank transfers of their equity interests in High Century, which are held by the Sohu Group’s legal department and may be completed and effected at Sohu Media’s election.
Pursuant to the agreement, the shareholders executed in blank transfers of their equity interests in Heng Da Yi Tong, which are held by the Sohu Group’s legal department and may be completed and effected at Focus HK’s election.
Pursuant to these agreements, AmazGame, Gamespace and Changyou Chuangxiang, respectively, provide marketing, staffing, business operation and maintenance services to Gamease and Guanyou Gamespace, respectively, in exchange for a fee equal to the cost of providing such services plus a predetermined margin. Each agreement terminates only when AmazGame, Gamespace or Changyou Chuangxiang, as the case may be, is dissolved.
Pursuant to these agreements, AmazGame, Gamespace and Changyou Chuangxiang, respectively, provide marketing, staffing, business operation and maintenance services to Gamease and Guanyou Gamespace, respectively, in exchange for a fee equal to the cost of providing such services plus a predetermined margin.
Charles Huang’s address is Suit 611, Chinachem Tower, 34-37 Connaught Road Central, Hong Kong. (4) Mr. Shi Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. (5) Dr. Dave Qi’s address is 3/F, Tower E3, Oriental Plaza, 1 East Chang An Avenue, Beijing 100005, People’s Republic of China. (6) Dr.
Charles Huang’s address is Suit 611, Chinachem Tower, 34-37 Connaught Road Central, Hong Kong. (4) Mr. Shi Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. 131 Table of Contents (5) Dr.
Pursuant to the agreement, the shareholders executed in blank transfers of their equity interests in Heng Da Yi Tong, which are held by the Sohu Group’s legal department and may be completed and effected at Focus HK’s election. 138 Table of Contents Loan agreements and equity pledge agreements between AmazGame and the sole shareholder of Gamease and between Gamespace and the sole shareholder of Guanyou Gamespace.
Pursuant to the agreement, the shareholders executed in blank transfers of their equity interests in High Century, which are held by the Sohu Group’s legal department and may be completed and effected at Sohu Media’s election. Loan and share pledge agreement between Sohu Focus (HK) Limited (“Focus HK”) and the shareholders of Heng Da Yi Tong.
The principal business address of Macquarie Group Limited is 50 Martin Place Sydney, New South Wales, Australia. The principal business address of Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust is 610 Market Street, Philadelphia, PA 19106.
The principal business address of Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust is 610 Market Street, Philadelphia, PA 19106, United States.
Certain of the contractual arrangements described above between the VIEs and the related wholly-owned subsidiaries of the Sohu Group are silent regarding renewals. However, because the Sohu Group has a controlling financial interest under U.S.
Each agreement terminates only when AmazGame, Gamespace or Changyou Chuangxiang, as the case may be, is dissolved. 134 Table of Contents Certain of the contractual arrangements described above between the VIEs and the related wholly-owned subsidiaries of the Sohu Group are silent regarding renewals. However, because the Sohu Group has a controlling financial interest under U.S.
Equity interest purchase right agreements among AmazGame, Gamease and the sole shareholder of Gamease and among Gamespace, Guanyou Gamespace and the sole shareholder of Guanyou Gamespace.
Loan agreements and equity pledge agreements between AmazGame and the sole shareholder of Gamease and between Gamespace and the sole shareholder of Guanyou Gamespace.
(10) Includes 200,000 ordinary shares that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of February 29, 2024. (11) Photon Group Limited’s address is c/o Sohu.com Limited, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China.
Dewen Chen’s address is c/o Changyou.com Limited, Changyou Creative Industrial Park, No. 65 East Bajiao Road, Shijingshan District, Beijing 100043, People’s Republic of China. (10) Includes 120,000 ordinary shares that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of February 21, 2025.
In December 2019, Changyou entered into additional supplemental agreements with Fox Financial pursuant to which Fox Financial provided security for its repayment obligations to Changyou, and Changyou similarly provided security for its repayment obligations to Fox Financial.
In December 2018 and 2019, Changyou entered into several supplemental agreements with Fox Financial, pursuant to which (i) all accrued and unpaid interest on the loans was added to the principal of the corresponding loans; (ii) Fox Financial provided security for its repayment obligations to Changyou; and (iii) Changyou similarly provided security for its repayment obligations to Fox Financial.
(12) Data based on a Schedule 13G/A filed jointly by Macquarie Group Limited, Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust with the SEC on February 14, 2024. Each of Macquarie Group Limited and Macquarie Management Holdings Inc. reported that it was deemed to beneficially own 3,429,040 ordinary shares beneficially owned by Macquarie Investment Management Business Trust.
Each of Macquarie Group Limited and Macquarie Management Holdings Inc. reported that it was deemed to beneficially own 3,429,040 ordinary shares beneficially owned by Macquarie Investment Management Business Trust. The principal business address of Macquarie Group Limited is 50 Martin Place Sydney, New South Wales, Australia.
Joanna Lv’s address is c/o Sohu.com Limited., Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. (9) Mr. Dewen Chen’s address is c/o Changyou com Limited, Changyou Creative Industrial Park, No. 65 East Bajiao Road, Shijingshan District, Beijing 100043, People’s Republic of China.
(8) Includes 50,000 ordinary shares subject to options exercisable within 60 days of February 21, 2025. Ms. Joanna Lv’s address is c/o Sohu.com Limited, Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. (9) Mr.
Zhonghan Deng’s address is 16/F, Shining Tower, No. 35, Xueyuan Road, Haidian District, Beijing 100191, People’s Republic of China. 136 Table of Contents (7) Mr. Dave De Yang’s address is 11132 Egeria Drive, Odessa, FL 33556, United States. (8) Includes 55,000 ordinary shares subject to options exercisable within 60 days of February 29, 2024. Ms.
Dave Qi’s address is 3/F, Tower E3, Oriental Plaza, 1 East Chang An Avenue, Beijing 100005, People’s Republic of China. (6) Dr. Zhonghan Deng’s address is 16/F, Shining Tower, No. 35, Xueyuan Road, Haidian District, Beijing 100191, People’s Republic of China. (7) Mr. Dave De Yang’s address is 11132 Egeria Drive, Odessa, FL 33556, United States.
All of the loans carry a fixed rate of interest which approximated the market interest rate at the inception of the loans. In December 2018 and 2019, Changyou entered into several supplemental agreements with Fox Financial.
All of the loans carry a fixed rate of interest which approximated the market interest rate at the inception of the loans.
Removed
Pursuant to the supplemental agreements, all accrued and unpaid interest on the loans as of December 31, 2018 and December 31, 2019 was added to the principal of the corresponding loans.
Added
(11) Photon Group Limited’s address is c/o Sohu.com Limited, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. (12) Data based on a Schedule 13G/A filed jointly by Macquarie Group Limited, Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust with the SEC on February 14, 2024.
Removed
In January 2019, Changyou advanced additional RMB denominated loans to Fox Financial, such that the principal amounts of Changyou’s outstanding RMB-denominated loans to Fox Financial as of December 31, 2018 were equal to the principal amounts of Fox Financials’ outstanding U.S. dollar denominated loans to Changyou as of December 31, 2018, multiplied by the monthly average RMB to U.S. dollar exchange rate published by the Bank of China for the month of December 2018.
Added
The agreement provides for loans to the shareholders of High Century for them to make contributions to the registered capital of High Century in exchange for the equity interests in High Century, and the shareholders pledge those equity interests to Sohu Media as security for the loans.

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