Zhang Chaoyang, CEO of Sohu, has claimed that Sohu regrets entering the American market as a listed company. The news comes as a serious blow to China's internet industry.

Sohu was unable to rank among the top three internet portals, according to the Internet Investigation Report released recently by the China Internet Association. Zhang Chaoyang said in an interview that although such a ranking is meaningless, he admitted that Sohu actually "neglected" internet users for a period of time because it had been dealing with the pressure from Wall Street. Owing to Sohu's missteps in the market, Baidu was given a historical opportunity for development.

The Internet Investigation Report released recently by the China Internet Association shows that Sina, Netease and Tencent ranked in first three respectively in their user market share amongst large domestic portals in 2006. Sohu, as one of the traditional large portals, was unexpectedly absent from the list.

In response to this report, Zhang Chaoyang argued that at present it is still difficult to assess the impact of websites in the China's internet market and the data of browse quantity provided by a third party cannot be completely trustworthy. Therefore, it is meaningless to rank only according to a certain indicator.

"Right now, internet users obtain information mainly from Sina and Sohu, chat with QQ, search with Baidu. The whole pattern of Internet usage has yet to change,"said Zhang.

In addition, Zhang also emphasized that at present Sohu is dedicated to the development of the Sogou search engine and Sohu blogs, but its revenues mainly originate from network advertisements.

Although Sohu was ever one of the first Chinese internet corporations in the Nasdaq market, if he could rethink the decision, Zhang Chaoyang would have chosen not to be a listed company.

"Sohu's entering the American market as a listed company is a sadness for the whole of China's internet industry. We have been busy with short messaging systems and wireless services and we have 'neglected' internet users," said a rueful Zhang, adding that it was during the several years (since the year 2000) when China's internet corporations entered the American market that allowed Baidu to step up in the domestic market.

At present, Baidu has played a dominant role in the domestic search market and even has stepped on the road leading to internationalization. However, Zhang Chaoyang said that he still has great hopes for the Sogou  search engine, as the domestic search market is still in its initial developmental stage. With the participation of network magnates, such as Netease and Tencent, the search market will be more competitive in the future.

Dr. Zhang Chaoyang (Charles Zhang) - Chairman of the Board, CEO, SOHU.com
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