Business

Sohu.com Inc, China’s third-biggest Web portal, has said online advertising revenue growth may slow in 2009 to half this year’s pace as sales ease after the Olympic Games, which start in August.

“In 2009, there will be a little slowdown in the pace of growth,” Co-President Belinda Wang said at a briefing in Hong Kong on Friday attended by Bloomberg News.

Sales of online display ads were expected to increase 20 percent to 30 percent in 2009, compared with a projected growth rate of more than 40 percent this year, she said.

Sohu shares have more than tripled in the past year as the company’s sponsorship of the Beijing Olympics attracted higher advertising spending from customers including Samsung Electronics Co and adidas AG.

The projected slowdown next year “is in line with expectations,” said Dick Wei, who rates Sohu shares “overweight” at JPMorgan Chase & Co in Hong Kong.

Many of the investors are looking at the long-term prospects of the Internet advertising market, which is still very healthy.”

First-quarter profit at Sohu, which operates the official Beijing Olympics Website, jumped more than fivefold to US$21.6 million, beating analysts’ estimates, the company reported in April.

Advertising sales, which made up 41 percent of the total, rose 36 percent to US$34.8 million, while online game revenue gained 24 times to US$41 million.

“The online advertising business will remain the focus for the company,” accounting for between 40 percent and 50 percent of total sales this year, Wang said.

Sohu shares, which rose 0.4 percent to US$83.30 in Nasdaq Stock Market trading last Thursday, have gained 53 percent this year, compared with an 11 percent increase for larger rival Sina Corp.

Sohu plans to start user trials of a new game, “The Duke of Mount Deer,” by the end of this year, Wang said.

(Shanghai Daily June 23, 2008)