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  • DavidKJ_69 DavidKJ_69 Jul 7, 2004 9:47 AM Flag

    NTES warning significant for SOHU

    Because it is an indicator of the weakness of the SMS market for the recent quarter, and since SOHU derives a larger percentage of its revenue from SMS than NTES or SINA, it is worse news for SOHU than any of its competitors.

    SOHU will most likely disappoint on the SMS side of the business, but ad revenues will be strong.


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    • If you look at what you said like this , then please explain to me why JNPR went up from $5s to above $28 while CIEN did not although they are in the same sector.
      YOu have to look at these like : one steals market from the other and the one who gains customers will be rewarded.

      Personally , I consider SOHU to be the next Yahoo for Chinese people

    • Let me tell you why NTES will be short of revenue in SMS:

      1. The most important one is the very poor management. Netease's wireless value added service department did very bad for several consecutive quarters, and Mr. Ling was very angry and thus fired several executives in the past quarters. The problem is the new executives in this department are still not good;

      2. If you check Netease's SMS page, there is ONE IMPORTANT NOTICE over there through out the year saying there is some problem with their SMS system and some users may have trouble to use their services. Just think about it, this notice will let many may users leave Netease;

      3. Although the traffic is almost the same as Sohu, but the quality is very bad compared to Sohu. Netease drives its traffic by BBS and SOHU drives its traffic by real contents.

      • 1 Reply to goldenturtleca
      • Those may all be true, but what about the industry-wide trends including increased churning due to increased competition. NTES' results can also be partially attributed to loss of market share IMHO.

        New SMS provideders are agressively marketing to convert users, this will result in a dilution of the market and will impact the big 3 the most, as they have the largest existing user bases.

    • This management wouldn't have been buying back shares if they were concerned.

      If the stock starts to shake off the early morning sellers, you'll know the buyback money is working again.

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