(Updates with comment from consultant in fourth paragraph.)

(Bloomberg) -- People.cn Co., controlled by the Chinese Communist Party's newspaper publisher, aims to sell shares in an initial public offering as state media companies seek stock listings to compete with private rivals.

The owner of websites including people.com.cn may offer 69.1 million shares, or a 25 percent stake, in the proposed sale, according to a filing to the China Securities Regulatory Commission yesterday. The company, a unit of the People's Daily, didn't disclose pricing details of the planned listing on the Shanghai exchange.

People.cn plans to use proceeds from the offering to fund a 527 million yuan ($83.5 million) spending program to upgrade networks and content, more than a decade after online rivals Sina Corp. and Sohu.com Inc. went public in the U.S. People's Daily, founded in 1948, is the official newspaper of the ruling Communist Party.

"They need to tap capital markets to compete," said Vivek Couto, executive director at industry consultant Media Partners Asia Ltd. in Singapore. China's central government is "broadly supportive" of moves by state media companies to obtain stock market listings, he said.

The IPO application from People.cn will be reviewed on Jan. 13, the regulator said in a statement on its website yesterday.

Citic Securities Co. is managing the offering, according to the filing.

Website Rankings

People.com.cn was the 50th most-popular website in China on Aug. 22, according to the filing, which cited data from Chinarank.org.cn. The website of New York-listed Sina was ranked fourth on that day, while Sohu's was placed seventh, according to the filing.

China Xinhua News Network Co., a television company controlled by China's official Xinhua News Agency, last month completed acquisition of a controlling stake in Hong Kong-listed Tsun Yip Holdings Ltd.

During China's Cultural Revolution in the 1960s and 1970s, editorials in the People's Daily were considered authoritative statements of government policies. The newspaper's header was handwritten by former Chinese leader Mao Zedong, and it has an average daily circulation of 2.3 million copies, according to its website.

Other Shareholders

People.cn also controls other websites including globaltimes.cn and sportsonline.com.cn, according to its filing.

State-owned carriers China Mobile Communications Corp., China United Network Communications Group, and China Telecommunications Corp. are among shareholders in People.cn, according to the filing. Parent People's Daily owns about 80 percent of the unit's stock, according to the document.

Revenue rose 75 percent to 331.7 million yuan in 2010 from 190 million yuan a year earlier, according to the filing. Profit more than tripled to 81.6 million yuan in 2010.