sohu
Shenzhen 7Road Technology
Changyou
7Road

Sohu.com Buys Majority Stake In Gaming Company 7Road For Up To $100 Million

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Sohu.com, one of China’s leading online media, search and gaming companies, this morning announced that its MMORPG subsidiary Changyou.com is to acquire a majority stake in Shenzhen 7Road Technology (“7Road”), an online games developer and publisher based in China.

Changyou will acquire 68.26% of the equity of 7Road for approximately $68.26 million in cash (see how that works?), plus additional variable cash consideration of up to a maximum of $32.76 million in performance-based earn-outs.

The acquisition is expected to be completed by June 30, 2011.

With the acquisition, Changyou aims to expand to new audiences by adding a development team that specialized in browser-based, rather casual games rather than the massively multiplayer online games Changyou has to date been known for.

7Road is the company behind DDTank, one of the most popular multiplayer shooting games in China that hit more than 350,000 peak concurrent users globally in Q4 2010.

Changyou.com began operations as a business unit within Sohu.com back in 2003 was carved out as a separate company in December 2007 and completed an IPO on April 7, 2009.

The company this morning reported quarterly earnings: total revenues reached a record $97.1 million, an increase of 35 percent year-over-year. Net income rose to $52.8 million, or $0.99 per share, an increase of 33 percent year-over-year.