Loss-making Sohu.com sees no break in financial gloom ..
Tom:
Check this out,these guys are supposed to be China.com's rival.Looks as though the one with the moolah is going to win this game and we know who just happened to have some spare cash.Love it when the competition is feeling the heat,funny they guys are not even in Cayman Islands.
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BLOOMBERG in Beijing
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Sohu.com, one of the mainland's top Internet service providers (ISPs), says it has no idea when it will stop losing money, as expenses soar and sales growth lags.
The company, which provides a Chinese-language portal for Internet users on the mainland, said a year ago it expected to break even this year. Now, it will not talk about such targets.
"Things are accelerating, things are happening faster than we expected," chief executive Charles Zhang said. "We have more expenditures, so the break-even point has been postponed."
"This is a game of spending money and how fast you can spend money."
Early this year, the company, a subsidiary of Internet Technologies China, changed its name from Sohoo.com, to make it clearer that it was not a Chinese version of Yahoo!.
That may not have been necessary since, unlike United States-based Yahoo!, Sohu.com is losing money, like most mainland ISPs. Its poor performance contrasts investor excitement over Chinese-language Net stocks. This month, an initial share offering by China.com, a Hong Kong-based Web site operator, was more than 100 times oversubscribed.
Sohu.com's costs rose as competition from other sites forced it to add more original content such as news, sports, lifestyle and financial information to what had been a relatively simple search engine.
Other features such as free e-mail and chat rooms serve the same purpose, giving mainland Web surfers, who are no less fickle than their counterparts abroad, an incentive to stay at the Sohu.com site.
Analysts say the constant development of new products and features, however expensive, is crucial to mainland ISPs as they brace for a more competitive future in which foreign rivals such as Yahoo! may challenge them directly.
"If [mainland ISPs] continue to improve, I can't see why they shouldn't be able to continue" despite foreign competition, said Jared Peterson, research director at International Data Corp China.
As Sohu.com struggles with soaring expenses, its revenue is rising less strongly than it hoped. The company says sales are growing, but not as fast as it expected a year ago.
Revenue last year was below the company's US$1 million forecast, Mr Zhang said, declining to be more specific. Revenue this year would be "a few times" higher than last year and may hit $8-$10 million next year.
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