The market has suffered from 10 months of sanctions and new policies, and it is clear the industry will not resume the spectacular growth it saw in years past anytime soon.

Nasdaq-listed Linktone saw revenues fall 2.5 percent in the first quarter to US$15.1 million (HK$117.78 million), while net income fell slightly to US$3.2 million. Linktone's revenue from short messages rebounded to US$9.8 million for the quarter, up by 7.6 percent from the fourth quarter of last year after two quarters of decline.

Linktone still generates 85 percent of revenues from second-generation wireless services, mainly SMS.

Revenues from more advanced 2.5G services and audio-related services fell 17 percent to US$5.3 million.

Linktone, along with other providers of the 2.5G service multimedia messaging service (MMS), which is a service that allows users to send pictures, text, audio and video to other mobile users, has been hurt by China Mobile's new MMS revenue recognition policy.

Linktone's shares were up by 5.15percent at US$7.55 going into Friday trading after hitting a high of US$8.07 Wednesday.

Linktone rival Kongzhong announced first-quarter revenues of US$17 million Monday, up 3 percent from the fourth quarter of last year.

Kongzhong booked US$13.68 million in revenues from its more lucrative 2.5G services in the first quarter, a 7 percent quarter-on-quarter drop. 2.5G services account for 87 percent of Kongzhong's total revenues.

Its shares have edged up slightly to US$8 since earnings were released Monday.

China Mobile and China Unicom began levying fines and sanctions on wireless service providers last fall in order to purge the market of shady and illegal services, but also to reassert control of the industry.

The new regulations have put a stranglehold on growth, hurting pure wireless value-added service providers such as Linktone and Kongzhong as well as mainland Internet portals, which first became profitable offering the popular services.

China's two leading online travel services providers have been rising this week, with market leader Ctrip.com up 6.2 percent at US$49.38 going into Friday and its eLong rival gaining 14.7percent.

Ctrip and eLong are up 20 percent and 27 percent over the last month, respectively.

ELong, in which Barry Diller's InterActiveCorp owns a 52 percent stake, announced first-quarter revenues of US$4.7 million, down from US$4.9 million in the fourth quarter, after the market closed Monday.

But its net loss dropped to US$850,000 from US$1.3 million.

By comparison, Ctrip had income of US$4.8 million on revenues of US$11.9 million in the first quarter.

Mainland online gaming company The9 announced results after the market closed Wednesday.

The9 currently generates the bulk of revenues from 9Webzen, a joint venture with South Korean game developer Webzen, which operates Webzen's online game ``MU'' in China.

9Webzen saw its first-quarter revenues fall by 40.6 percent quarter on quarter to US$3.1 million from US$5.2 million in the fourth quarter.

9Webzen's net income decreased by 75 percent quarter on quarter to US$270,000 from US$1.1 million.

The9 itself recorded a loss of US$1.3 million for the quarter on revenues of US$1.5 million.

Investors may be looking more at The9's potential than its current earnings statements because the company operates the 3D massive online role-playing game ``World of Warcraft'' in China.

World of Warcraft is currently the hottest online role playing game in the world. The game is currently in a free trial period in China. The9 recently reported that World of Warcraft recorded 500,000 simultaneous gamers when the trial was launched at the end of last month.

Online game industry watchers will be watching to see how many of these players remain as paying subscribers of World of Warcraft when the game is launched commercially early next month.

The9 announced a competitive pricing plan of 0.45 yuan an hour for the game. The9 was down 4 percent this week to US$19.92 going into Friday trading.

Its competitor and leading online gaming company Shanda Interactive was up 7.5 percent for the week going into Friday.

Shanda announced the launch of a comprehensive customer service website this week, as well as a partnership with electronics manufacturer Changhong, for the development of family entertainment products.

Shanda and Changhong will work together on Shanda's planned gaming console product, which will allow users to access Shanda's entertainment products on television sets in homes over a broadband connection.

Microsoft formally entered China's Internet market with the launch of an MSN Chinese-language portal Thursday. Microsoft is focusing on instant messaging and email, hoping to capitalize on the popularity of its MSN Messenger and Hotmail services in China.

Microsoft has partnered with many well-known Chinese Web sites for the content on the portal.

The launch will further increase competition in a market that already includes instant messaging leader Tencent, leading portal Sina, number two portal Sohu and portal and gaming company Netease.

Tencent closed the week slightly higher at HK$5.60, Sina was down 3 percent going into Friday trading, Sohu was up 4 percent and Netease was off slightly for the week.

Shares of Hong Kong-listed mainland business-to-business company HC International, which runs the Web site www.hc360.com, halted trade May 13 pending an announcement regarding a major transaction.

Rumors have been circulating that it is looking to sell its search engine Zhongsou. HC denies these rumors, but says that it is looking for new investors for Zhongsou.