(SOHU) announced that it was notified by China Mobile Communication Corporation ("CMCC") that its multimedia messaging services ("MMS") with CMCC, will be resumed effective August 1, 2005, one month before the one year suspension would have been lifted.

A 12-month suspension, beginning September 1, 2004, had been handed to by China Mobile for sending unsolicited bulk MMS to its users in China. During the past year, Sohu was not able to apply for new wireless services with the large state-run telecom, leaving the Internet media icon at a great disadvantage in China's teeming mobile market.

At the time, the company reported that this particular suspension arose after Sohu sent 1400 unsolicited SMS advertisements for a "I Want Photo" picture-messaging service.

However, Sohu users had been complaining for at least 18 months previous to the suspension that the company was sending them other messages without their authorization, and charging the users for those messages. However with little oversight in China for these types of consumer matters, and few published reports placing pressure on the company to change things, Sohu had been able to continue the practice unimpeded.

On July 29, 2005, Sohu received a formal notice from CMCC that it decided to resume MMS cooperation with Sohu on its nationwide network from August 1, 2005. Since Sohu had transferred its MMS business onto China Mobile's MISC platform in June 2005, the company is technically ready for the resumption of the MMS business.

As Sohu will need to rebuild the MMS business after eleven months of suspension, the company currently does not expect the resumption of its MMS services will make its business outlook for the third quarter 2005 to be materially different from the guidance disclosed in the earnings announcement on July 27, 2005.


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