(Yicai Global) Aug. 10 -- Chinese internet giant Sohu is predicting losses of as much as USD25 million in the third quarter as its advertising business does poorly amid Covid-19 and its gaming revenue shrinks as video gamers head back to work.

This does not take into account any gains or losses to be made from the sale of its search engine unit Sogou to internet giant Tencent Holdings, Sohu said in its unaudited financial report for the second quarter released today.

The Beijing-based firm’s board of directors has not yet had the chance to review the recent take-over bid from Tencent at USD9 per share which would involve Sogou delisting from the New York Stock Exchange, it said.

Sohu’s revenue was down 9 percent year on year in the second quarter to USD421 million, a fall of 3 percent from the previous quarter. Most of the losses were due to poor performance in its online advertising business which saw revenue drop 13 percent year on year to USD279 million.

Online gaming revenue for the 2nd quarter was down 21 percent from the first quarter, but up 4 percent from the same period last year, to USD106 million, as an initial surge in online activity due to the novel coronavirus lockdowns came to an end and people went back to work. Gaming activity is expected to fall further next quarter.

The firm posted Generally Accepted Accounting Principles net losses of USD80 million in the 2nd quarter, and non-GAAP net loss of USD77 million.

Its recent acquisition of Changyou, a leading Chinese developer and operator of online games, saw an additional income of USD88 million in withholding tax, which boosted Sohu’s net income to USD8 million in the 2nd quarter.

Editor: Kim Taylor