A LEADING Chinese news portal and online game operator Sohu Inc said third-quarter profit jumped 21 percent year-on-year with solid growth in advertising income while revenue from its search engine boomed.

Net income was US$45.2 million, or US$1.16 per share, the company said in a statement yesterday.

Total revenue climbed 20 percent in the period to US$164.1 million, and online games continued to be the biggest contributor as sales from the sector jumped 25 percent from a year earlier to US$85.6 million.

Search revenues surged 134 percent in the quarter to US$5.4 million while online advertising sales were up 22 percent to US$59.1 million.

Alibaba Group and Yunfeng Fund LP, a private-equity fund backed by Alibaba Chairman Jack Ma, signed a framework agreement in August to pay US$24 million for a 16 percent stake in Sohu's search engine unit, Sogou Inc. Sohu chief executive of Sohu Charles Zhang will also take a 16 percent stake in Sogou.

Zhang reiterated that they envision Sogou becoming the second largest domestic search engine behind Baidu.

"We believe the introduction of strategic investors gives us a more competitive position and promising outlook for collaboration with China's largest e-commerce website," Zhang said in the earnings report.

The company predicts total revenues in the fourth quarter to be between US$163 million and US$168 million.

"We'll focus on improving our search results and providing an innovative Internet browser to grab bigger market share," said Wang Xiaochuan, Sogou's chief technology officer.