UPDATE 3-China's Sohu.com profit beats forecast, eyes Olympics

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By Sophie Taylor and Eric Auchard

SHANGHAI/SAN FRANCISCO, Feb 5 (Reuters) - Chinese media company Sohu.com said quarterly profit more than doubled, beating expectations, fuelled by record growth in advertising and online gaming in one of the world's biggest Internet markets.

Sohu (SOHU.O: Quote, Profile, Research, Stock Buzz), which has its roots in online search and competes with Baidu.com (BIDU.O: Quote, Profile, Research, Stock Buzz) and Google (GOOG.O: Quote, Profile, Research, Stock Buzz), said it expects robust online advertising spending to continue in the run-up to the Beijing Olympics this summer.

Shares in Beijing-based Sohu -- "search fox" in Chinese -- rose 3.5 percent to $50.65 in after-hours trading. The stock had lost more than 3 percent amid a wider U.S. sell-off on Monday.

"For fiscal 2007, Olympic partners, sponsors and suppliers increased advertising spending with Sohu by 74 percent year on year," Sohu Co-President Belinda Wang told a conference call.

"Looking ahead, we believe the growth of our brand advertising business will continue to be robust."

China had 210 million Internet users at end-2007, second only to the United States. China is expected to become the world's top Internet market in terms of users early this year, the official Xinhua news agency reported, citing industry sources.

Excluding one-time items, Sohu expects first-quarter earnings per share of 43-45 cents. On the same basis, analysts forecast a profit of 34 cents, according to Reuters Estimates.