Sohu’s net profit reached 6,100,000 USD or 16 cents per share this fiscal season while 8,900,000 USD or 23 cents per share was claimed in the same quarter of 2005. Industry analysts believe that decreasing profits have been caused by the company’s ill-advised investment in the sports market and the unpromising market performance of the company’s key products, including Sougou.

Sohu revenue rose 16% to 34,400,000 USD in the fourth quarter from 2,970,000 USD in last year’s fourth quarter. Its revenue, however, is far from what analysts expected.

Sohu’s main profit comes from internet advertising. Sohu’s internet advertising revenue rose 23% to 24,900,000 USD including 2,900,000 USD earnings from the company’s paid ad search engine. With the increase of ads revenue, the cost of advertisements has also increased. Fourth quarter brand advertisements were pegged at 7,100,000 USD, a 66% increase from 4,300,000 USD last year while search ads cost 1,700,000 USD, a 56% increase from 1,100,00 USD last year. Sohu shares fell 7.5% to close at 24.92 USD yesterday.