China’s new clampdown costs Weibo and Sina $1b
beijing — With an official edict barely longer than a tweet, China’s media regulator shaved about $1 billion off the value of Sina and Weibo, the two companies that run the country’s version of Twitter.
On Thursday night, the State Administration of Press, Publication, Radio, Film and Television ordered services including Weibo to stop broadcasting what it said was negative commentary in violation of government regulations. While the regulator didn’t say in its one-line statement what precise actions should or would be taken, it was enough to send Weibo’s stock sliding 6.1 per cent in New York on Thursday. Sina, which controls the company, slid almost five per cent.
The regulatory ban, the latest in a series of attempts to curb content on the Internet, could disrupt a revival for Weibo that’s now underway. The messaging service turned to video streaming over the past year to rejuvenate growth and has since reignited user interest, pushing its monthly audience to 340 million people — surpassing Twitter’s — and its market value above $16 billion. Chairman Charles Chao is now focused on expanding Weibo into areas including news aggregation and live video streaming.
Weibo, AcFun and Ifeng.com are “broadcasting large amounts of programming that don’t meet national standards and which propagate negative opinions on public affairs,” the national broadcasting regulator said in a statement posted on its website. “We’re taking measures to halt the programmes and begin rectification.”
China has one of the world’s most restrictive internet regimes, tightly policed by a coterie of government regulators intent on silencing dissent to preserve social stability. Weibo itself employs a staff of thousands to monitor its service and remove posts it worries could anger Beijing. While civil libertarians and users decry this institutionalised censorship, Chao in June pointed to an epidemic of fake news on Facebook and Google as evidence that more top-down control is warranted.
Videos on Weibo could still be played on Friday, even though the company confirmed in a statement that it had received the regulatory notice and was communicating with authorities to try and understand the scope of the notice. — Bloomberg