The prolonged dispute between China's two largest portals - Sina.com and Sohu.com - has deepened, with Sina.com taking legal action against its rival. Sina filed a lawsuit in a Beijing court accusing Sohu of stealing content and violating copyrights. Sina said it was forced to take the action after Sohu continued to ignore its warnings. In an announcement issued yesterday, Sina accused Sohu of constantly stealing Sina content from its short-messaging services (SMS) and its financial, news and sports channels. Sina alleged Sohu had stolen hundreds of Sina's SMS in the past month, as well as products from Sina's news channel. 'We have been warning Sohu through various means, from oral warnings to official letter warnings; from telephone calls to legal letters from our lawyers,' Sina said. 'We have been trying all friendly means to resolve the problems, but they have not only completely ignored us, they have even got worse.' Sohu director of corporate communications Caroline Straathof said Sina's accusations were unfounded. 'There are no grounds for a lawsuit . . . now Sina wants to damage Sohu through a [public relations] battle instead of facing the competition squarely,' Ms Straathof said. She said Sina's historic strength was in its news centre while Sohu's strength was in its search engine. However, over the past few months, Sohu had diverted heavy resources to strengthen its news centre. 'Sohu's dynamic news centre is a growing threat to Sina . . . and Sohu is the leader in SMS, so there is absolutely no grounds for this accusation.' She said Sina's move was intended to start a PR battle on the domestic front, that aimed to damage Sohu's reputation. 'For the past eight months, Sina has been dealing with many internal problems, and now it tries to deflect attention by striking at the clear industry leader,' she said. An analyst said the lawsuit would not only damage Sohu's image but also have a negative effect on Sina's reputation, and he would rather see the companies spend their efforts developing their own businesses. A legal battle between the two portals is unlikely to be avoided as Sohu said it would fight to defend its reputation. The company said it was not concerned about Sina's legal action, as 'we know these accusations are totally unfounded'. The dispute between Sina and Sohu began last year, when Sohu complained Sina had posted some negative and damaging reports and comments on Sohu. Sohu demanded that Sina apologise publicly and threatened to take legal action against Sina. However, the dispute gradually died. Sina did not apologise, nor did Sohu take any legal action against its rival. 'We were busy building our business. We want to let our business results speak for [themselves],' Ms Straathof said. The two portals, both listed on the Nasdaq Stock Market, have been competing head to head, as both have similar business models and are targeting a similar market segment. They have both experienced pressure in securing online advertising revenues since the bursting of the technology bubble in 1998. Sina shares fell from a peak of US$54.50 in May 2000, to Wednesday's close of US$1.55, representing a drop of 97.15 per cent. Sohu shares have fallen 91.46 per cent from their peak of US$13.13 in July 2000 to Wednesday's last traded price of US$1.12.