Monday, March 13, 2006

SOHU's CEO speaks again

Sohu's CEO, Charles Zhang, rang NASDAQ open bell last week, and later on went on CNBC to speak out again.

As he always did, Charles insists that:

* Wall Street and foreign investors do not understand China Internet market. Well, it is natural to assume everybody else is fool while he is the only wise one in the world, but it does not help much by speaking it out in public.

* Mr. Zhang kept saying that Google will be a failure, and his Sogou search engine will outrun Baidu within a year. I see the contrary. I think Goolge will prevail in China given its super quality of search. Last night one of my relatives in Beijing called me, he was running a small business of indoor decoration. He told me he has bought a keyword ad at Google, but not others like Baidu, SOhu, or SINA. If you look at search quality, it is eay to find that Google is the best among these guys, Baidu is matching very closely after Google, Sogou and Sina search are the second tier. Thus I don't think Sogou will do better than Baidu in one year, rather,I think Mr. Zhang may need to watch out for being wiped out in this search race.

Although I do not agree with these public bold statements from this SOHU CEO, I am not bearish on the stock itself. I like the stock not because of rosey picture of Sogou, but the strong growth of online ads. I have been bullish on it and holding it, until recently I sold out for a profit. I still think a one year target of 27$ is still achiveable. I look to buy back the stock if there is a weakness.

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