As the founder, CEO and president of Sohu.com, Charles Zhang is working to turn his company into China's largest search engine.

Under Zhang's direction, Sohu grew to become the most popular Website in China's fiercely competitive Internet market. This lasted until July, 1999, when the China Internet Network Information Center (CNNIC) reported that Sohu had fallen to number two. Six months later, Sohu dropped another notch, to number three.

According to Zhang's criteria of "concentrated" page views and top operational efficiency, however, Sohu is still number one. Sohu.com averaged six to seven million page views a day in 1998-1999, 90 percent of which came from Mainland China. To Zhang, "concentrated" page views are the most significant measure of the commercial value of a site and are worth more than page views spread out over the globe.

A Jan. 4, 1999 article in China Computerworld described Zhang as "a confident man of action" who compares himself to Silicon Valley entrepreneurs. From early on, it has been his dream to develop a Web site to provide China-related business information to American firms interested in doing business with China.

Zhang studied at the Massachusetts Institute of Technology, where he befriended several scholars and got them to ante up the seed money for his new company, Internet Technologies China (ITC). As the company grew, Zhang was able to attract investment from Intel and Dow Jones as well.

ITC originally focused on helping domestic companies design homepages. Its website originally featured nothing but a series of links to local Web sites.

Not surprisingly, the site didn't do very well. Then, in May 1997, Zhang visited AOL and met with Jerry Yang, the founder of Yahoo!. It was this meeting that inspired him to reinvent the ITC website.

In October of that year Zhang beat Yahoo! to the punch and debuted the first Chinese language search engine, Sohu.com. The concept took off and by April 1999 CNNIC reported that Sohu was the most popular search engine in China. The success of the site was due in part to the free search service, content channels, free email, multimedia services and Net surveys.

The company reported US$1 million in revenues in 1998, 70 percent of which came from online advertising from multinationals such as Microsoft, Intel, Compaq, Nokia, Audi and HP, among the first to sign on. Zhang claimed that in the same year, Sohu garnered 60 percent of all Web ad contracts in China.

In January 2000, Sohu formed a partnership with 8848.com in order to utilize the latter's e-commerce capabilities. It was the first alliance of its kind in China.

By the end of 1999, Sohu was ranked the third most popular website in China. True, it had slipped from its top spot a year and a half earlier, but it still received a huge amount of traffic.

Eager to capitalize on its popularity (and hoping to cash in before it slipped further in the rankings) Sohu applied to list on the Nasdaq in February, 2000. Its goal was to raise over US$86 million by issuing common stock, to upgrade Sohu's networking and computer infrastructure, expand sales, boost marketing efforts, increase personnel and pursue acquisitions and investments.

Unfortunately, Beijing issued regulations in early 2000 requiring Chinese businesses to get government approval before listing abroad. Sohu applied for such approval, but has so far failed to get it. This may be due to Sohu's heavy foreign investment: China currently forbids more than 49 percent foreign investment in its telecom/Internet sector. Sohu's Nasdaq listing is still pending.

Not one to twiddle his thumbs, Zhang has been busy expanding Sohu's business scope and developing new markets. In March, 2000, Sohu announced it would be teaming up with Nokia to introduce wireless Internet services to China's growing numbers of mobile phone users. In a March 3 China Economic Times article, Zhang said he believed the involvement of cellular phone makers in Chinese Internet services could double or even triple the size of China's Internet market.

(chinaonline.com)