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ChangYou's objective is to establish one of the most powerful online game brands in China. The company intends to achieve this objective by pursuing the following strategies:

• leverage ChangYou's success with TLBB and its game development platform to develop new MMOGs;
• continue to employ and improve ChangYou's integrated player-feedback and game-enhancement system;
• expand our online games business in six major areas, including MMOGs, web games, mobile games, social games, user platforms and overseas markets.;
• explore other partnership and game licensing opportunities in overseas markets.;
• expand our business into a broader platform business with the acquisition of 17173.com, by extending its reach, expanding its services and increasing stickiness
• focus on building human capital; and
• pursue strategic acquisition and alliance opportunities.

To implement the above strategies, ChangYou believes that the following competitive strengths enable it to compete effectively and to capitalize on the rapid growth in the online game market:

• leading market position in the Chinese online game market;
• strong capability to regularly translate player feedback into game enhancements to extend the lifespan of the Company's games;
• leading technology platform, which includes ChangYou's uniform game development platform, advanced 2.5D and 3D graphics engine, effective anti-cheating and anti-hacking technologies, proprietary cross-networking technology and advanced data protection technology;
• strong marketing and game development support from Sohu, the Company's controlling shareholder and a leading internet portal in China; and
• experienced management team with local game development and operational expertise.