Friday, June 20, 2008

Sohu.com (SOHU) Sees Ad Revenue Slowing in 2009

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Sohu.com (SOHU) is weak this morning on news it sees ad revenue slowing to 20-30% in 2009; but frankly this company has been booming off its gaming business anyhow. That hasn't stopped the stock from being punished this morning to the tune of 7%. I've cut this name back severely on this tremendous run up (too early in fact), but I'd like to add some in the lower $70s but we have that daunting gap in the chart in the low to mid $60s as well...
  • Chinese media firm Sohu.com (SOHU) expects core advertising revenue to grow up to 45 percent this year as corporations vie for consumers during the Beijing Olympics, but it warned on Friday growth may taper off to about 20 to 30 percent in 2009.
  • "The Olympic Games is the major driver for growth in online advertising," Wang said.
  • Given Sohu is the biggest Internet firm on the mainland, our advantage of strong content will enable the company to achieve a 40 percent or more year-on-year growth in advertising revenue."
  • The firm, which also vies with Baidu.com (BIDU), accounts for advertising revenue in two parts: so-called brand advertising, which is more than 90 percent of total online ad sales, and ad revenue from its search engine business.
  • Wang said a three-day suspension of its online games service, in memory of victims of the May 12 earthquake in Sichuan that was the country's deadliest disaster in decades, would not affect second-quarter revenue much.
  • It maintained guidance on online gaming revenue of up to $45 million and for advertising at up to $41 million. uidance for total revenue in the second quarter, including other revenue sources, was maintained at up to $96 million, she said.
[Apr 28: Sohu.com Crushes Estimates - Up 15%]
[Feb 5: Initiating Sohu.com Starter Position]
[Feb 4: Sohu.com Also Impressive]

Long Sohu.com, Baidu.com in fund; no personal position



6 comments:

Bluedog said...

Mark,
How do you get the rectangular charts on Stockcharts.com, versus the normal square charts?

BD

TraderMark said...

I don't have any indicator at the bottom of the chart i.e. volume, so it does it on its own.

C.R.E.A.M. said...

I've been pulling the trigger the past few days on GIGM. You mentioned online gaming above so if you have time I suggest you take a peak.

TraderMark said...

I'll look this weekend, but doubt it will be preferred to my PWRD - we'll see :)
Always looking for new names.

Bluedog said...

Cool. Thanks. I'll check it out.

Blue said...

SOHU won the rights to broadcast the Olympics via the web. I would think this will help bolster their ad revenue as they should get more hits being the only web provider in China streaming the games?

The stock at $70 should be key next week. Either a bounce or a test of that gap @ 60.

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