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Rumor: Sohu Launches Internal Incubation Program

Tencent Tech, 5/29/13

A source at Chinese internet firm Sohu (Nasdaq: SOHU) claims that divisions inside the company — including the Sohu.com portal division and the company's sales and wireless divisions — have been working on internal incubator projects for the past half-year. As with the incubation process for the company's online game subsidiary Changyou (Nasdaq: CYOU) and search engine subsidiary Sogou, the new programs call for managers to select teams, commit to projects, and in some cases seek outside investment before spinning their projects off at the appropriate time. The incubation program is internally called the "Xuanya Jihua" ("Precipice Plan").

Wang Zihui, GM for Sohu Microblog, is one of the team leaders. According to Wang, his team is currently at work on a social music app featuring mobile radio functionality and "We Media"-based voice chat and social networking and incorporating the strengths of microblogs and Tencent's (0700.HK) WeChat (Weixin) mobile messaging application. R&D began on the app four or five months ago, and the product team is currently continuing to develop the app, preparing for operations, and building out the team, which operates largely independently. According to one industry source, Wang's team has already received outside investment.

Another source familiar with the situation revealed that Sohu's sales division has established its own precision marketing company under the aegis of co-president and COO Belinda Wang and VP of technology Zhou Lin. Wang revealed earlier this year that Sohu was exploring new methods of digital marketing leveraging mobile internet and Big Data.

Sohu's wireless division is another platform for the company's "in-house startup" efforts. The division has established an incubator called the "App Search Center" headed by GM Fang Gang, and will release three mobile applications in the near future: "Ye Huo" ("Wildfire") (released), a mobile video app; "Chun Feng" ("Spring Breeze") (to be released), a mobile reading app; and "You Sheng" ("New Life") (released) a recruiting app.

Keywords: wireless strategy mobile music mobile SNS mobile advertising online advertising mobile recruitment Fang Gang Zhou Lin Internet investment mobile video R&D Sohu mobile Internet Wang Zihui big data Belinda Wang mobile reader mobile application mobile IM

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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