SOURCE: The Bedford Report

The Bedford Report

November 28, 2011 08:16 ET

Youku and Sohu Aim to Appease Strict Chinese Authorities

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NEW YORK, NY--(Marketwire - Nov 28, 2011) - The Chinese internet sector has been hectic of late as the regulatory risk for Chinese Internet stocks is increasing and has been on the upswing for the last couple of months. According to China's Central Committee, the Communist Government will "strengthen guidance and management over social networks and instant messaging tools, regulate online information distribution, and cultivate a civilized, rational Internet environment." The Bedford Report examines the outlook for companies in China's Internet Sector and provides stock research on, Inc. (NYSE: YOKU) and, Inc. (NASDAQ: SOHU). Access to the full company reports can be found at:

China is the world's largest internet market with an estimated 500 million users. The Chinese government routinely blocks citizens from viewing searches and websites it deems subversive under the Golden Shield Project or Great Firewall.

Earlier this month the Chinese Government gained the agreement of major Chinese businesses, including search engine firm Baidu and e-commerce giant Alibaba, to increase their own censorship actions. According to official Chinese media, the firms agreed to "curb rumours" and the spreading of "harmful information."

The Bedford Report releases investment research on the Chinese Internet Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Last month China's ruling Communist Party said it will strengthen management of online social media sites that have increasingly questioned government action. Members of the party's Politburo visited web companies after a deadly train crash in July. Web users criticized the government's handling of the crash and spread commentary of the accident at odds with the official line.

Bill Bishop, a Beijing-based independent Internet analyst, told Bloomberg that the danger for companies is that increased government oversight of content at sites such as Sina's Weibo may lead to fewer outspoken people using the platforms over time, "basically deadening the community." Xinhua reported that China had 195 million microbloggers at the end of June, more than a 200 percent increase from the end of 2010.

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