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Comment (I was hoping for more of a sell off in Sohu.com (SOHU)after Friday's "news" that after an Olympic style bump this year intheir advertising business, things would return to more normal in 2009.[Jun 20: Sohu.com Sees Ad Revenue Slowing in 2009] Notable Calls blog points outthat analysts have rushed to its defense Monday morning, and the stock isbouncing sharply at least for now. Again, gaming not advertising hasprovided the spark in this name.
Citigroup notes Friday'ssell-off was sparked by a Reuters article confirming what almosteveryone already knew: Sohu will face challenging YoY comps on itsbrand adv side due to a post-Olympics "hangover" effect.However, the firm believes online gaming will continue to power rev andearnings growth in 2009. They were modeling +18% YoY for 2009 adv revs,so the company's expectations of "+20-30% YoY" is actually strongerthan their estimates. Finally, they note that online gaming is highly immune from growing inflationary pre... Advertisement
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