Slowing Chinese Economy Threatens Youku and Sohu

  Chinese internet stocks have struggled over the last month as reports of a slowing Chinese economy has led to growth concerns for tech companies. China's internet population was growing at a rate of six million per month according to research conducted by the consultancy McKinsey&Co earlier this year. The Bedford Report examines the outlook for companies in China's Internet Sector and provides stock research on Youku.com, Inc. (NYSE: YOKU) and Sohu.com, Inc. (NASDAQ: SOHU). Access to the full company reports can be found at:

www.bedfordreport.com/YOKU www.bedfordreport.com/SOHU

China's third-quarter gross domestic product was up 9.1% from a year earlier, slowing from 9.5% growth in the second quarter and 9.7% growth in the first, China's National Bureau of Statistics said. Growth fell short of the median 9.2% forecast of 14 economists surveyed by Dow Jones Newswires.

"If the GDP growth reading was 9.2% or 9.3%, the market may think it's acceptable, but 9.1% looks worrisome, especially compared to the second quarter's 9.5%," said Qian Qimin, an analyst at brokerage Shenyin Wanguo.

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Despite posting 17 percent year-on-year revenue growth in the third quarter, shares of Sohu were crushed following the announcement as costs related to game launches and video offerings continued to chip away at its margins. Profit was $45 million, or $1.17 per share, in the three months ending Sept. 30, Sohu announced.

Youku.com Inc. is an Internet television company in People's Republic of China. Its Internet television platform enables consumers to search, view and share video content quickly and easily across multiple devices.

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