EXHIBIT 10.32

MARKETING SERVICES AGREEMENT

This Marketing Services Agreement is dated as of January 1, 2009, by and between
Sohu.com Inc., a Delaware corporation (together with its subsidiaries and
variable interest entities, “Sohu”), and Changyou.com Limited, a Cayman Islands
corporation (together with its subsidiaries and variable interest entity,
“Changyou”). Sohu and Changyou are individually referred to as a “Party,” and
together as the “Parties.” Capitalized terms used herein and not otherwise
defined will have the meanings ascribed to such terms in Article I hereof.

RECITALS

WHEREAS, Sohu operates a leading Chinese web portal, Sohu.com;

WHEREAS, Changyou develops, operates, and licenses MMORPGs (as defined below),
as more completely described in a draft Registration Statement on Form F-1
submitted on November 10, 2008 for confidential review and comment by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act and to
be filed publicly with the SEC via its EDGAR system (the date of such filing,
the “Live Filing Date”) following the satisfactory completion of such review and
comment and as financial market conditions permit (as so filed, and as amended
thereafter from time to time, the “IPO Registration Statement”);

WHEREAS, the Parties currently contemplate that Changyou will make an initial
public offering (“IPO”) pursuant to the IPO Registration Statement;

WHEREAS, Sohu and Changyou have undertaken various advertising and marketing
efforts relating to their businesses and, after the IPO, desire to continue
their advertising and marketing efforts in accordance with the terms and
conditions of this Agreement; and

WHEREAS, Sohu controls the voting power of the outstanding ordinary shares of
Changyou;

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions,
covenants and provisions of this Agreement, and intending to be legally bound,
Sohu and Changyou mutually covenant and agree as follows:

ARTICLE I

DEFINITIONS

1.1 Defined Terms. The following capitalized terms have the meanings given to
them in this Section 1.1:

“Affiliate” means any entity that controls, is controlled by, or is under common
control with a Party. As used herein, “control” means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such entity, whether through ownership of voting securities or
other interests, by contract or otherwise. Solely for purposes of this
Agreement, however, Changyou and Sohu are deemed not to be Affiliates.

 

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“Agreement” means this Marketing Services Agreement, as the same may be amended
and supplemented from time to time in accordance with the provisions hereof.

“Changyou” will have the meaning set forth in the preamble to this Agreement.

“Changyou Business” means the development, operation and licensing of client-end
installed MMORPGs and other support services, as previously conducted by Sohu
and as conducted and contemplated to be conducted by the Changyou Group on a
world-wide basis as of the date hereof and the date that the IPO Registration
Statement becomes effective under the U.S. Securities Act of 1933, as more fully
described in the IPO Registration Statement.

“Changyou MMORPGs” means MMORPGs that are owned, controlled or maintained by
Changyou or its Affiliates.

“Changyou Group” means Changyou and its subsidiaries and VIEs.

“Changyou Links” has the meaning set forth in Section 2.1(a) of this Agreement.

“Changyou Websites” means all websites owned, controlled or maintained by
Changyou.

“Deliverables” has the meaning set forth in Section 7.1 of this Agreement.

“IPO” has the meaning set forth in the preamble of this Agreement.

“Inter-Company Agreements” has the meaning ascribed to it in the Master
Transaction Agreement.

“Live Filing Date” has the meaning set forth in the preamble of this Agreement.

“Master Transaction Agreement” means the Master Transaction Agreement between
the Parties dated as of January 1, 2009, as the same may be amended from time to
time.

“MMORPGs” means client-end installed massively multi-player online role-playing
games.

“SEC” has the meaning set forth in the preamble to this Agreement.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Sohu” has the meaning set forth in the preamble to this Agreement.

“Sohu Websites” means all websites owned, operated or controlled by Sohu,
including, without limitation, Sohu.com, Chinaren.com, and 17173.com, but not
including Changyou Websites.

 

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ARTICLE II

LINKS AND ADVERTISING SERVICES

2.1 Links and Advertising Services.

(a) Links. Sohu will include at all times while this Agreement is in effect
links (such links, collectively, “Changyou Links”) to Changyou’s MMORPGs or to
the Changyou.com homepage, on the Sohu.com homepage, in at least as prominent a
location as Changyou Links are currently included. Exhibit I is a screenshot
showing the two links that Changyou is using as of the date of this Agreement.

(b) Advertising Services. Sohu will provide to Changyou at all times while this
Agreement is in effect advertising services on the Sohu Websites relating to
Changyou’s MMORPGs’ promotional activities in the areas of online
advertisements, banners, buttons, game zones and other online advertising
mediums.

(c) By no later than January 31 of each year, Sohu and Changyou will discuss and
agree on the number of Changyou links to be posted, the position of each
Changyou Link and the annual quota for Changyou online advertisements (“Online
Advertisements”) on the Sohu Websites. The details of the Online Advertisements,
such as the forms, position, period of display, and price, will be determined
quarterly based on sales orders within the annual quota as agreed between Sohu
and Changyou. If, due to operational requirements, Sohu determines in its
reasonable and sole discretion that it needs to make changes to the home page,
catalogue pages or channels on the Sohu Websites, and such changes will result
in changes to the position and/or size of a Changyou Link and/or an Online
Advertisement, then Sohu will notify Changyou in writing of its intended changes
fifteen (15) days in advance of making such changes, specifying the revised
position and size of the Changyou Link and/or the Online Advertisements.
Changyou will, within ten (10) days of receiving the aforementioned notice,
confirm its understanding of the same in writing to Sohu. Sohu will make
reasonable efforts to accommodate any objections Changyou makes to such changes
within such ten-day period, provided that Sohu will be under no obligation to
make any such accommodation if Sohu determines, in its sole reasonable
discretion, that such accommodation is not practicable. If Changyou fails to
reply to Sohu’s notice within the stipulated period, Changyou will be deemed to
have accepted the changes.

(d) Sohu will provide monthly reports to Changyou stating, for each of the Sohu
Websites where Changyou Links and Online Advertisements are included, the number
of “clicks” made on each Changyou Link and Online Advertisement.

2.2 Compensation.

(a) Links. In consideration of the rights granted to Changyou in this Section 2,
Changyou will pay to Sohu, within 30 days after the end of each calendar
quarter, a fee of RMB800,000 for each Changyou link placed on the Sohu.com
homepage, subject to Sohu’s providing to Changyou, by the end of each such
quarter, an invoice and reasonably detailed documentation. The amount of such
fee will be increased (or decreased, as the case may be) effective each
January 1 and July 1 in accordance with then-prevailing rates charged in the

 

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Peoples’ Republic of China for similar link services between unrelated third
parties, as reasonably agreed to by Sohu and Changyou.

(b) Advertising Services. In consideration of the advertising services provided
to Changyou under this Section 2, Changyou will pay an advertising fee, which
will be charged at a discount off the publicly listed rates for advertisements
on Sohu Websites then in effect. The discount will be discussed and agreed to by
the parties by January 31 of each year. The parties agree that the discount Sohu
provides to Changyou will not be less favorable than any Sohu provides to any
other third party under similar circumstances. The advertising fee will be paid
to Sohu within 30 days after the end of each calendar quarter, subject to Sohu’s
providing to Changyou, by the end of each such quarter, an invoice and
reasonably detailed documentation.

2.3 Sohu Rejections. Sohu reserves the right to reject any Changyou Link that is
not reasonably consistent with Sohu’s standards, provided that Sohu notifies
Changyou of the reason for rejection and accepts such Changyou Link if the
reason for rejection is cured.

ARTICLE III

PROMOTION AND TECHNICAL SERVICES

3.1 Identification as Part of Sohu Group and Use of Sohu Logo. Sohu grants to
Changyou the non-exclusive right to use, during the term of this Agreement, the
phrase “Changyou.com is a member of the Sohu Group,” or a similar phrase
approved by Sohu, and the Sohu logo, as the same may be in use by Sohu from time
to time, in all Changyou Websites and in all advertising and promotional
materials, including in any Changyou-sponsored advertising. Changyou will pay to
Sohu, within 30 days after the end of each calendar quarter, a fee of RMB
8,000,000 for such use of the Sohu logo by Changyou during the quarter, subject
to an invoice provided by Sohu.

3.2 Sohu Passport. Sohu will provide all technical services necessary to enable
the Changyou Websites to be accessed through Sohu Passport. In consideration of
Sohu’s providing such services, Changyou will pay to Sohu within 30 days after
the end of each calendar quarter, a fee of RMB 38 for each new Changyou
registered MMORPG user obtained through Passport accounts, subject to Sohu’s
providing to Changyou, by the end of each such quarter, an invoice and
reasonably detailed documentation. The amount of such fee will be increased (or
decreased, as the case may be) effective each January 1 and July 1 in accordance
with then-prevailing rates charged in the Peoples’ Republic of China for similar
services between unrelated third parties, as reasonably agreed to by Sohu and
Changyou.

3.3 Sohu PEAK System. Sohu will make available to Changyou Sohu’s PEAK system
online payment platform, to allow Changyou MMORPG players to connect from their
accounts directly to their payment accounts, to make direct online purchases of
virtual prepaid cards or game points for Changyou’s MMORPGs. For such services,
Sohu will charge Changyou such amount as does not exceed the then prevailing
rates charged by third parties for similar services, the Parties acknowledging
that the amount payable to Sohu by Changyou as of the date of this Agreement is
0.9% of the full face value (i.e., not reduced by any discount offered by
Changyou to its customers), of the virtual prepaid cards or the full face value
of the game points purchased, as applicable. Amounts charged by Changyou to its
customers will be

 

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collected by Sohu through its PEAK system and transferred to Changyou, less a
0.1% service charge, within 30 days after the end of each calendar quarter.

3.4 Bulletin Board System (BBS). Sohu will build and maintain a BBS for each
Changyou MMORPG, and will provide “24/7” hosting and maintenance services for
such BBS. In addition, Sohu will provide technical support to help Changyou to
manage the BBS. In consideration of Sohu’s providing such services, Changyou
will pay to Sohu, within 30 days after the end of each calendar quarter, a fee
of RMB400,000 for each BBS site used by Changyou. The parties acknowledge and
agree that Sohu currently is operating three BBS sites for Changyou MMORPGs, as
shown on Exhibit II to this Agreement. The amount of the fee payable by Changyou
to Sohu for such BBS sites and services will be increased (or decreased, as the
case may be) effective each January 1 and July 1 in accordance with
then-prevailing rates charged in the Peoples’ Republic of China for similar
services between unrelated third parties, as reasonably agreed to by Sohu and
Changyou.

ARTICLE IV

DOMAIN NAMES

4.1 License. While this Agreement is in effect, Sohu grants to Changyou a
license to:

(a) any domain names that Sohu currently owns that at are used by Changyou in
connection with Changyou MMORPGs or the Changyou Websites (other than domain
names that it has transferred or is required to transfer to Changyou or its
Affiliates pursuant to the Master Transaction Agreement or the agreements
referenced therein) (Exhibit III is a list of domain names that Changyou is
currently using), and

(b) the use of the word “sohu” in domain names that are currently owned or used
by Changyou or that Changyou may wish to own in the future, in each case limited
to use by Changyou in connection with the development, operation, or promotion
of its MMORPG business.

4.2 For the use of such domain names, Changyou will pay to Sohu within 30 days
after the end of each calendar quarter, a fee of RMB 300,000 for each domain
name used by Changyou during the quarter. The amount of such fee will be
increased (or decreased, as the case may be) effective each January 1 and July 1
in accordance with then-prevailing rates charged in the Peoples’ Republic of
China for similar licenses between unrelated third parties, as reasonably agreed
to by Sohu and Changyou.

ARTICLE V

INTELLECTUAL PROPERTY

5.1 Trademark License. Changyou retains all right, title and interest in and to
the Changyou Websites, and Changyou’s trademarks, service marks, trade names and
logos worldwide. Changyou grants Sohu a non-exclusive limited-use license to use
Changyou’s trademarks, service marks, trade names and logos only in connection
with placing links to Changyou urls to be provided to Sohu by Changyou, for
performing its other advertising and

 

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promotional obligations to Changyou as set forth in this Agreement, and for
joint promotions of the Sohu and Changyou brands.

5.2 Ownership. Each Party owns and will retain all right, title and interest in
its names, logos, trademarks and service marks, copyrights and proprietary
technology, including without limitation, those names, logos, trademarks and
service marks, copyrights and proprietary technology currently used or any which
may be developed in the future. Neither Party will copy, distribute, reproduce
or use the other Party’s names, logos, trademarks and service marks, copyrights
and proprietary technology except as expressly permitted under this Agreement.

ARTICLE VI

TERM

6.1 Termination. This Agreement may be terminated or amended by mutual written
consent of the Parties. In addition, this Agreement will terminate upon the
later of:

(c) the date that is three years after the first date upon which Sohu ceases to
own in the aggregate at least ten percent (10%) of the voting power of the then
outstanding securities of Changyou; and

(d) the fifth anniversary of the date of the Live Filing Date.

Unless otherwise agreed to by the Parties in writing, the provisions of Article
5 and Articles 7 through 9 will survive indefinitely after the termination of
this Agreement.

ARTICLE VII

LIMITATION OF LIABILITY

7.1 No Warranty. Except as expressly stated in this Agreement, all materials,
documents, advertising, and services delivered under this agreement
(“Deliverables”) are provided “as is.” Except as expressly stated in this
agreement, neither party makes any representations or warranties of any kind
concerning the Deliverables, express or implied, including, without limitation,
warranties of merchantability, fitness for a particular purpose,
non-infringement, or the absence of latent or other defects, whether or not
discoverable. Neither Party extends any warranties of any kind as to their
content and/or websites being error free.

7.2 Limitation of Damages. In no event will either Party, or their directors,
officers, agents, employees or affiliates, be liable for incidental, special or
consequential damages of any kind, including economic damages or injury to
property and lost profits, under any theory of law, regardless of whether such
Party is advised, has other reason to know, or in fact does know of the
possibility of the foregoing.

ARTICLE VIII

INDEMNITIES

8.1 Intellectual Property. Each Party (“Indemnifying Party”) will indemnify,
defend and hold harmless the other Party, and its subsidiaries and variable
interest entities (except that,

 

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for purposed of this Article VIII, Sohu.com Inc. subsidiaries and variable
interest entities will not include Changyou and its subsidiaries and variable
interest entity), and their respective directors, officers, employees and agents
(“Indemnitees”), against any and all claims, actions, liabilities, losses, and
expenses (including reasonable attorneys’ fees) brought by a third party
relating to or arising out of any claim that any content provided by such
Indemnifying Party and displayed on the Changyou Websites or the Sohu Websites
constitutes a defamation or invasion of the right of privacy or publicity, or
infringement of the copyright, trademark or other intellectual property right,
of any third party. This indemnity will specifically not apply to content
provided by visitors to the Changyou Websites or Sohu Websites, including, but
not limited to, such visitors who use chat rooms, bulletin boards, or other
forums that allow visitors to display material that is not within the control of
the Indemnifying Party.

8.2 Procedure. The Indemnitee will promptly provide the Indemnifying Party with
written notice of any claim which the Indemnitee believes falls within the scope
of this Section 8; provided, however, that, except to the extent the
Indemnifying Party is actually prejudiced by the Indemnitee’s failure to provide
such prompt notice, such failure to provide prompt notice hereunder will not
limit the Indemnitee’s rights under this Section 8. The Indemnitee may, at its
own expense, assist in the defense of any such claim if it so chooses, provided
that the Indemnifying Party will control such defense and all negotiations
relative to the settlement of any such claim.

ARTICLE IX

MISCELLANEOUS

9.1 Consent. No consent or approval of either Party pursuant to this Agreement
will be effective unless it is in writing and evidenced by the signature of the
Chief Executive Officer or Chief Financial Officer of the consenting or
approving Party (or such other person that the Chief Executive Officer or Chief
Financial Officer has specifically authorized in writing to give such consent or
approval).

9.2 Entire Agreement. This Agreement constitutes the entire agreement between
the Parties with respect to the subject matter hereof and will supersede all
prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof.

9.3 Governing Law and Jurisdiction. This Agreement, including the validity
hereof and the rights and obligations of the Parties hereunder, will be
construed in accordance with and all disputes hereunder will be governed by the
laws of the State of New York, U.S.A., applicable to contracts made and to be
performed entirely in such state (without giving effect to the conflicts of laws
provisions thereof). Each of the Parties hereby submits unconditionally to
jurisdiction of, and agrees that venue will lie exclusively in, the federal and
state courts located in the City of New York for purposes of the resolution of
any disputes arising under this Agreement.

9.4 Amendment. This Agreement may be amended only by mutual written consent of
the Parties.

 

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9.5 Notices. Notices and other communications to be given by any Party pursuant
to the terms of this Agreement will be given in writing to the respective
Parties to the following addresses:

if to Sohu:

Level 12, Sohu.com Internet Plaza

No. 1 Unit Zhongguancun East Road, Haidian District

Beijing 100084

People’s Republic of China

Attention: Chief Financial Officer

Email: carol@sohu-inc.com

if to Changyou:

East Tower, JinYan Hotel

No. 29 Shijingshan road, Shijingshan

Beijing 100043

People’s Republic of China

Attention: Chief Financial Officer

Email: alex@sohu-inc.com

or to such other address or email address as the Party to whom notice is given
may have previously furnished to the other in writing as provided herein. Any
notice involving non-performance or termination will be sent by hand delivery or
recognized overnight courier. All other notices may also be sent by email,
confirmed by mail. All notices will be deemed to have been given when received,
if hand delivered; when transmitted, if transmitted by email; upon confirmation
of delivery, if sent by recognized overnight courier; and upon receipt if
mailed.

9.6 Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed to be an original but all of which will constitute one and the
same agreement.

9.7 Binding Effect; Assignment. This Agreement will inure to the benefit of and
be binding upon the Parties hereto and their respective legal representatives
and successors, and nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. No Party may assign this Agreement or any
rights or obligations hereunder, without the prior written consent of the other
Party, and any such assignment without such consent will be void; provided,
however, each Party may assign this Agreement to a successor entity in
conjunction with the transfer of substantially all of the Party’s business,
whether by sale of substantially all assets, merger, consolidation or otherwise.

9.8 Severability. If any term or other provision of this Agreement is determined
by a court, administrative agency or arbitrator to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement will

 

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nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.

9.9 Failure or Indulgence not Waiver; Remedies Cumulative. No failure or delay
on the part of any Party in the exercise of any right hereunder will impair such
right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

9.10 Interpretation. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement. None of the provisions of this Agreement are intended to
supersede any provision in any other Inter-Company Agreement or any other
agreement with respect to the respective subject matters thereof.

[Signatures on Next Page]

 

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WHEREFORE, the Parties have signed this Marketing Services Agreement effective
as of the date first set forth above.

 

SOHU.COM INC. By:  

 

  Name   Title: CHANGYOU.COM LIMITED By:  

 

  Name   Title:

 

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Exhibit I:

Links Currently Used by Changyou

LOGO [g10433ex10_3221pg011.jpg]

 

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Exhibit II:

BBS Sites Used by Changyou as of the Date of Agreement

LOGO [g10433ex10_3221pg012.jpg]

 

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LOGO [g10433ex10_3221pg013.jpg]

 

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LOGO [g10433ex10_3221pg014.jpg]

 

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Exhibit III

Domain Names Used by Changyou as of The Date of The Agreement

 

•  

tl.sohu.com

 

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ldj.sohu.com

 

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bo.sohu.com

 

•  

blade.sohu.com

 

•  

bbs.tl.sohu.com

 

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