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Porn issue may strip away Sohu earnings

Chinese-language internet portal Sohu is expecting revenue from mobile messaging services to be flat in the third quarter due to regulatory concerns about pornographic content.

After announcing the company's second-quarter results on Wednesday, which included a 354 per cent year-on-year rise in fee-based services including text messaging, chief operating officer Victor Koo said partner China Mobile had urged it not to promote some products, believed to be pornographic text messages and graphics.

'China Mobile asked us to stop marketing those products through the website. This has been factored into our Q3 revenue guidance,' said Mr Koo.

The Ministry of Information Industry has told mainland mobile operators to crack down on pornographic and politically sensitive content on their partners' websites. The big four portals - Sina, Sohu, Netease and Tom.com - were told to 'clean up' their risque content, which was used as mobile downloads and has been a proven profit driver for the portals.

Sohu chief executive Charles Zhang said non-advertising revenue accounted for US$12.5 million of the company's $19.3 million in second-quarter revenue, of which $11.8 million was from SMS.

It expects to achieve non-advertising revenue in the third quarter of US$12.5 million to $13.5 million.

Sohu yesterday recorded its fourth consecutive profitable quarter with income of US$7.5 million.

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