New government-enforced regulations may force Chinese internet giant Sina to change the way it makes money.
According to the Wall Street Journal, the company is worried about an upcoming government edict that will force it to verify the identities of users on its immensely popular microblogging service Sina Weibo.
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The Journal reports that Sina posted a fourth quarter profit but that it had already noticed weaker advertising revenue in the current financial quarter.
The government’s demand that Weibo accounts be verified is part of its attempt to regain control of the country’s immensely popular social networks.
According to Chinese tech site DigiCha, the verification process will likely cost 2 RMB (US$ 0.32) per account. Not all that much on its own, but when you consider that Sina Weibo has over 300-million users, it becomes obvious that the verification process won’t be cheap.
“We believe the requirement to convert existing users into verified users…will have a negative impact on user activity in the short term,” Charles Chao, chief executive of Sina, told reporters in an earnings call.
Like all websites in China, Sina Weibo has to comply with China’s strict online censorship system, commonly known as The Great Firewall of China. Any content regarded as politically inflammatory is immediately snuffed out by the system.
This has not, however, stopped people from using the weibos to criticise government officials and their handling of corruption, scandals and disasters.
In the face of this kind of criticism, authorities looked to regain control of the weibos.
Initially the companies behind the weibos looked to block the accounts of users they deemed guilty of spreading false information after being approached by high-level officials.
Authorities then vowed to intervene more directly, hunting down and even arresting users it claims are spreading rumours online.
None of this, however, has resulted in a slow-down of traffic on Sina’s weibo.
Late last year, the microblog’s 300-million users were sending out an average of 86-million messages a day.