Updated from 2:15 p.m.
Shares in Chinese Internet portal
got walloped Friday on the news of a one-year suspension of its wireless messaging services.
The disclosure follows the revelation earlier this week that another portal company,
, had one of its services temporarily suspended -- signalling, perhaps, an era of greater constriction for companies supplying wireless content in China.
After falling as much as 19% Friday, Sohu.com's stock closed at $14.92, down 10.7%. Shares of other Chinese Internet and wireless companies fell as well: Sina dropped 6.7%, while
( TOMO) fell 7.8% and
Sohu.com's shares are down 65% from their 52-week high.
In a news release issued Friday, Sohu.com said the wireless phone operator
, through which Sohu.com offers some of its services, was dropping Sohu.com's multimedia messaging services for a year, starting Sept. 1.
China Mobile says it's suspending Sohu.com as punishment for a June 17 incident in which Sohu.com sent a marketing message to 1,374 wireless phone users in Sichuan Province without getting prior approval, according to Sohu.com, which didn't dispute China Mobile's account.
In addition, Sohu.com said certain China Mobile subsidiaries have instructed Sohu.com and other service providers to cut fees on their short messaging service offerings.
In the wake of the suspension and the lower billing rates, Sohu.com cut its guidance for the quarter ending Sept. 30. The company said that wireless revenue would be $1.5 million to $1.8 million lower than it forecast in late July, and wireless profit would drop by between $1 million and $1.3 million.
In July, the company had forecast quarterly earnings of around 24 cents a share on revenue of $28.1 million to $29.1 million.
Earlier this week, Sina disclosed in its 10-Q filing for the second quarter that China Mobile had suspended its interactive voice response service for "the violation of certain ... operating policies." Citing unnamed sources, Pacific Growth Equities issued a report Wednesday indicating that Sina had provided "976-Type" voice pornography services.
The recently disclosed moves by China Mobile, says Pacific Growth analyst Parham Ghorban, appear to be "part of an overall effort by mobile operators to clamp down and institute much more regulation on the mobile business out there."
Says Ghorban, "It's reasonable to ask who it's going to happen to next, and that creates some of the jitters in the market." Pacific Growth has an under weight rating on Sohu.com and an equal weight rating on Sina.