In the first quarter of 2024, along with the continued slowdown in the global economy, domestic and foreign policy environments, and industry emergencies, global stock indices were divided, and market confidence was insufficient, causing fluctuations in the valuations of overseas Chinese securities companies. The market value of listed Internet companies in China continued the downward trend since last year. By the end of March 2024, the total market value of listed Internet companies in China was 9.4 trillion yuan, down 3.1% from the previous quarter.

However, according to the Zhitong Finance App, the established Internet company Sohu (SOHU.US) recorded a contrarian performance. The stock price increased by about 6.45% in the first quarter of 2024, up 20.97% from the previous quarter. During this year, the company's stock price increased by more than 20%.

Why is Sohu unique to investors?

On the one hand, the company actively operates capital and continues to increase repurchases. Earlier, the company announced an American Depositary Stock Repurchase Plan with a total amount of up to 150 million US dollars. As of May 16, 2024, Sohu had repurchased 1726,718 shares of Sohu American Depositary Shares, with a total amount of about 17 million US dollars. Actively buying back shares not only shows confidence in the company's development, but also conveys value to the market.

On the other hand, Sohu focuses on the main channel to achieve long-term steady development of the business and bring it continuous growth.

On May 20, Sohu's 2024 Q1 earnings report was released. During the period, the non-GAAP net loss attributable to Sohu was US$22 million, better than previously anticipated.

From a business perspective, Sohu's revenue for this quarter was also within the company's expectations. Among them, brand advertising revenue was 16 million US dollars; online game revenue was 118 million US dollars, an increase of about 3% over the previous month. This also confirms that Sohu is still continuing its steady narrative style, and the company's business development is still developing steadily.

Rather than simple short-term financial figures, we should also focus on long-term information relevant to business development. Specifically, in this financial report, Sohu still has the following sets of information worth paying attention to:

First, in terms of Sohu Video, while the company continues to develop a “dual engine” strategy, it is also committed to scientific live streaming and other live streaming activities.

For example, the Sohu Technology Annual Forum has continued to discuss science in recent years. The 2024 Sohu Technology Annual Forum is dedicated to building an exchange platform for the scientific community and industry to discuss technological changes, from the development and application of 5G, AI and other technologies to cutting-edge scientific exploration. Since its development, the Sohu Technology Annual Forum has become a widely influential brand IP in the industry.

Second, Sohu Video's various IP activities are in full swing in terms of live knowledge streaming, short video social networking (attention stream), etc., and the business layout is beginning to bear fruit. Continue to innovate content IPs and become a powerful gateway to attract traffic. At the same time, high-quality content that broke the circle was also recognized by advertisers.

In the past two years, Sohu Video has included live streaming in the media matrix. Together with graphic information media, it has become an extension of Sohu's media platform. Sohu Video is committed to building a unique IP in the field of knowledge streaming, and is continuously exploring innovative commercialization opportunities. For example, the company incorporated “Zhang Chaoyang's Physics Course” into the “2024 Beijing International Auto Show”, further expanding its brand influence and enhancing its commercialization capabilities.

In order to meet the needs of advertisers, the company also adopted a new method of “watching the exhibition live” at the “2024 China Home Appliance and Consumer Electronics Fair”. This not only gave the audience a deeper understanding of the product, helped advertisers achieve better marketing results, but also highlighted its unique value.

Furthermore, Sohu Video's “Follow Stream” has created a high-quality vertical platform around PGC, UGC, and Vlog self-media short videos, forming an interesting (humorous), useful (knowledge), and highly viewable (national style, dance) content ecosystem. “Follow Stream” is like a video “social platform” in Sohu Video. Users can retweet, follow, and spend in the “Follow Stream” to meet friends via video. This quarter, Sohu launched the “2024 Sohu Video K-POP Master Class” campaign to promote Hanfu and traditional Chinese culture. The 2024 themed offline event “Sohu Video Broadcaster Conference” invited “broadcasters” in the fields of scientific knowledge, lifestyle, national style, dance and jump to gather live to exchange creative experiences, reflecting Sohu Video's unique platform value, all of which received widespread attention and recognition.

As can be seen from the development of live streaming of knowledge and the flow of attention, Sohu has a clear direction in terms of content layout, focusing on combining “depth” and “breadth”, continuing to launch high-quality content in terms of growth path selection, and continuously innovating the long-term principle of iteration. Using its unique IP and differentiated advantages, Sohu continues to host various events, which not only stimulates user interaction and content provision on its platform, but also helps the company obtain more profit opportunities. A healthy ecological cycle has already begun to operate.

According to McKinsey's three-level theory, all large companies that continue to grow have a common characteristic of maintaining the balanced development of three levels of business: the first level is to expand and protect core businesses, the second level is to establish emerging businesses, and the third level is to create viable candidate businesses.

At present, Sohu's business development has initially reflected McKinsey's three-level theory. First, using the “dual engine” of long and short videos as the driving force, continuously outputting high-quality content and using powerful content as a traffic entry point to solidify the foundation for monetization; second, using Sohu Video's “Follow Stream” as an outlet to extend social content, thereby enhancing fan retention, and further transforming it into deep community users; third, Sohu actively focuses on new technology applications such as AIGC to empower the news and game business. With high-quality content as a moat, Sohu's development is steady and steady, and the long-term growth logic is clear.