Uncertainty in China's Internet Sector Weighs on Shares of Baidu and Youku

   A mere two months ago, Chinese internet firms were some of the strongest performers on Wall Street. China boasts the largest number of internet users, and given the nation's strict censorship laws which minimize competition, companies such as Baidu and Youku were considered promising growth stories. Shares throughout the sector have plummeted since May however, as concerns about a new bubble in the tech sector has spread to China's Internet industry. The Bedford Report examines the outlook for companies in China's Internet Sector and provides stock research on Youku.com, Inc. (NYSE: YOKU) and Baidu, Inc. (NASDAQ: BIDU). Access to the full company reports can be found at:

www.bedfordreport.com/YOKU

www.bedfordreport.com/BIDU

A recent report from The Wall Street Journal argues that Chinese internet stocks are suffering from concerns about a slowdown in China's economy -- reflected in the fall of the country's benchmark stock index. Standard & Poor's said the performance in the past year of Chinese Internet companies with a market value of more than $100 million suggested the companies "might have been in a bubble that burst."

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Competition remains scarce for Baidu and Youku, however. China's government heavily regulates the internet, and while this has drawn significant scrutiny from the West, government officials cite its heavily regulated internet as the reason why the county is seeing falling cybercrime year on year. China promoted its controversial 'Great Firewall' and its deeply regulated internet as key to stemming the cyber terrorist threat.

Under China's internet censorship policies Facebook, Twitter, Youtube and several other marquee US websites are blocked. This has benefitted the so-called "Youtube of China" Youku.com. Last month Youku said that first quarter revenues more than doubled compared to the year ago period.

The Bedford Report provides Analyst Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. The Bedford Report has not been compensated by any of the above-mentioned publicly traded companies. The Bedford Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.bedfordreport.com/disclaimer

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