Sohu’s (SOHU) fourth quarter revenue disappointed Wall St. But, it is also a reminder of how tiny China’s leading internet firms are. And, they are not all growing quickly, a sign that internet use of local companies in China may not be as robust as it seems.
Sohu’s Q4 revenue was $34.4 million, up 16% over last year’s fourth quarter. Net income was only $6 million.
Companies like Google (GOOG) and Yahoo! (YHOO) are still having trouble getting a strong foothold in China, and as companies like Sohu and Baidu (BIDU) grow it will become even more difficult.
The leverage that US internet companies have today is the much larger revenue and balance sheets. It is an advantage that will go away quickly over time.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.