This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sohu's Drop Cracks China Net Sector's (SOHU) disappointing outlook Monday heralded a retreat among Chinese Internet and wireless content stocks.

Shares in fell as much as 14% Monday, and other Chinese new media stocks fell as well, led by Sina (SINA), (NTES), Tom Online (TOMO) and Shanda Interactive (SNDA)., which gains most of its revenue these days from online advertising, forecast first-quarter sales in the range of $22.5 million to $23.5 million, short of the Thomson First call expectations of $25 million.

The company also forecast earnings per share of 14 cents to 16 cents, below the First Call number of 17 cents.'s outlook calls for sequential growth in ad revenue but flatness in its nonadvertising business comprising wireless value-added services, online games and e-commerce.

The company's wireless business fell off a cliff last year upon China Mobile's (CHL) initiation of a one-year suspension in some of's wireless business for violations of China Mobile's operational guidelines. China Mobile also insisted make price cuts in other services.

Monday's numbers illustrate some of the fundamental challenges for investors in Chinese new-media content companies. While the size of China's population and the prevalence of wireless phones holds out the promise of Google (GOOG)-like growth, the relevant companies aren't necessarily able to come through on that growth as quickly as investors might hope.

In addition, investors have to contend with the fact that business rules are different in China. That one-year suspension for, after all, was punishment for the company's sending out an unauthorized marketing message to 1,374 customers that resulted in 23 subscriptions to a service costing $1.20.

It seems unlikely that a punishment as draconian as what suffered -- it said at the time that wireless revenue would be cut $1.5 million to $1.8 million in the third quarter of 2003 alone -- would be enforced by a U.S. wireless carrier in response to any similar policy violation by a content provider.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs