NEW YORK (AP) -- Shares of Chinese Internet companies tumbled Monday as one Web company's revenue guidance worried investors, building on concerns that the European economic crisis will significantly slow Chinese economic growth.
Sohu.com Inc., a Chinese search engine and Web portal, on Monday predicted profit and revenue for the current quarter that was short of analyst predictions. Sohu expects revenue declines in the first three months of 2012, from the end of 2011, in its brand advertising business and its search engine. Its adjusted first-quarter guidance, of 50 to 55 cents per share, was less than half the $1.20 per share that Wall Street was expecting.
Investors are worried about the effect on Chinese businesses if the country's slowdown reins in spending by its rising middle class.
China's exports have suffered from slackening demand — blame the slow recovery in the U.S. and fears of a looming recession in several European countries. The government has also tightened credit and investment rules to keep inflation in check, which has pressured growth.
On Monday, the International Monetary Fund warned that a sharp downturn in Europe could cut China's economic growth in half. The IMF said Beijing should be ready to launch a multibillion-dollar stimulus to ward off a slump in the world's second-largest economy.
The BNY Mellon ADR China Index, which tracks U.S. shares of Chinese companies, slid nearly 2 percent.
In midday trading, Sohu shares dropped $9.11, or 14 percent, to $53.94. They had been up 26 percent in 2012. Over the past 52 weeks, the company's shares have traded between $46.35 and $109.37.
U.S. shares of Changyou.com Ltd., a Chinese online game developer that Sohu owns a stake in, plunged $3.53, or 12 percent, to $25.56.
Other Chinese Web companies affected included online media company Sina Corp., whose shares dropped $3.80, or 5.1 percent, to $71.20; the leading search engine, Baidu.com Inc., which fell $2.62, or 2 percent, to $131.91; and online video site Tudou Holdings Ltd., an online video site, which lost 18 cents to $16.07.
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