Sina Weibo Braced For Tighter Regulation–Financial Times
- Posted by bbishop
- on September 18th, 2011
Kathrin Hille of the FT reports that China’s microblogs are braced for tighter regulation:
China’s leading microblog is developing systems to simplify the control of content and make the wildly popular social media tool less of a risk to social stability, its chief executive has said.
“Over the past two to three months, we have been looking into how to establish a trust system,” said Charles Chao, chief executive of Sina Corp which runs Sina ($SINA) Weibo, the country’s most active microblog. He cited the way vendors on e-commerce websites get rated by their customers as a potential model…
Mr Chao said the microblogs posed a “very serious challenge” for the government’s efforts to filter information and control society, and that many rumours spread through the services created “huge damage” to individuals and to the government.
“We will hand out different degrees of punishment to those who spread malicious rumours,” Mr Chao said, adding that the more prominent and widely respected microbloggers could act as a moderating force within the blogosphere, if complemented by a more reliable regulatory regime.
This news should be no surprise to readers of Digicha, nor should investors overreact. As I wrote last week in How Will China Tame Microblogs Like Sina Weibo? Regulations and Licenses:
It is likely the government will soon require a new license to operate a microblog. Historically, regulations and licenses have always lagged new products on the Chinese Internet. There were no specific licenses for online gaming, news, or video until usage of those products became large enough for the government to decide it needed to establish new rules.
A licensing requirement for microblogs would follow in that tradition, and in fact would be good news for the leading providers like Sina and Tencent, as that license would both provide a legal framework for microblog operations and create a significant barrier to entry for smaller sites. My guess is that a microblog license would be issued by the State Council and be even harder to obtain than an Internet news license, which is granted to state media and only the largest and most trusted Internet portals.
A microblog license requirement could be bad news for all the Tumblr clones, as most may be too small and too new to be trusted.
While there may be headline risk for Sina around new microblog regulations, I still think it is unlikely that the government will damage Weibo’s vitality and popularity to such an extent that the service is effectively neutered. The main risk to investors would come from a requirement that only firms with no foreign ownership can obtain a microblog license, as Jack Ma has claimed is the case for online payment licenses. I think such a requirement is unlikely, but nothing is impossible in China.
That said, expect Sina’s content management (aka censorship) costs to continue to rise rapidly. Sina may have the Twitter/Facebook of China, but it may not enjoy the Twitter/Facebook cost structure.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Bill Bishop is an American living in Beijing. He is bilingual and has experience working in both US and China. In 1997 he co-founded CBS MarketWatch and stayed until the sale in 2004 to Dow Jones. He was never a journalist, and instead worked in several business roles over the years, the last as head of the MarketWatch consumer Internet business. More »
- Sinocism China Newsletter For 08.30.12
- The Sinocism China Newsletter
- Today’s China Readings July 18, 2012
- Sina Sell-Side Still Searching For Muppets
- China Daily Readings
- Sina Admits It Has Not Complied With Weibo Real Name Registration Rules
- Groupon’s China Firesale
- Apologies For The Hiatus
- Tweeting The Sina Q4 2011 Earnings Call
- Quick Thoughts Ahead Of Sina Earnings
- August 2012
- July 2012
- May 2012
- April 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- Inside Sina Weibo
- Reuters: China VIE Company Structure Under Threat
- Authorities Removing Apple iPads From Chinese Store Shelves? (Updated)
- China's Internet: The Invisible Birdcage
- Is Tencent The Wrong Partner For Groupon In China?
- Jack Ma Talks To China Entrepreneur Magazine About The Alipay Case (UPDATED)
- If Sina Is Cooking Its Books I'll Eat This Blog
- Do You Know Where Your China Stock CFO Lives?
- China's MIIT Declares Most VoIP Services, Including Skype, Illegal
- New Report On China's Online Game Industry-$3.6B in 2009 Revenue, $9.2B By 2014
TagsAdvertising Alibaba Apple Baidu Beijing cctv Censorship china China Mobile Corruption Cyberwar DangDang eCommerce Facebook Fraud Gaming GFW Google Group Buying groupon Internet Investing IPO Media Mobile Music Netease PerfectWorld Piracy Policy Readings Regulations Search Shanda Sina SNS Social Games Tencent Twitter US-China Virtual Items Web Video Weibo WoW WVAS
- Group Buying
- Internet Security
- Listed Firms
- Online Games
- Online Memes
- Online Payments
- Online Trends
- Perfect World
- Public Relations
- Renewable Energy
- Social Gaming
- Traditional Chinese Medicine TCM
- Web Advertising
- Web Video
- World of Warcraft
StockTwits - All Updates