NEW YORK, NY — (Marketwire) — 09/01/11 — The threat of stricter government regulations has put pressure on Chinese internet stocks. China is sensitive regarding the Internet and imposes significant restrictions on online search and other social-networking activities. While Chinese internet firms must walk a fine line to avoid shut down, those that succeed are rewarded with less competition. The Bedford Report examines the outlook for companies in China-s Internet Sector and provides stock research on Baidu, Inc. (NASDAQ: BIDU) and Sina Corporation (NASDAQ: SINA). Access to the full company reports can be found at:
According to state-run newspaper China Daily, Chinese regulators recently shut down 6,600 websites in their efforts to clamp down on “illegal public relations deals” that employ similar tactics for commercial gain. Analysts at Turner Investment Partners said China shut down 1.3 million Web sites.
The risk of government actions has caused a noticeable downswing in several Chinese internet stocks. Last month shares of the Chinese search giant, Baidu, took a 9 percent hit after state broadcaster China Central Television aired a 30-minute special exposing negligence by members of the sales force in allowing fraudulent adverts on its platform.
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Last month Beijing-s Communist Party chief visited Sina Corporation headquarters and called for Internet companies to stop the spread of harmful information, which is seen as a threat to the government-s control.
China-s microblogging market has soared more than 200 percent year on year at the end of the first half of 2011. Sina Corporation says that the company has in excess of 140 million users as of June 30, 2011.
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