Will new regulations cut into SINA? (NTES, SOHU)

More pressure on the Chinese Internet names from government regulators trying to control the discourse. This was not great for Sina (SINA, quote) lately and may eventually put pressure on names like NetEase (NTES, quote) and Sohu (SOHU, quote) as well.

Beijing laid down new rules on the “weibo” category of online services — “microblogs” or Twitter-like accounts — designed to restrict anonymity on these platforms.

Anyone can read weibo posts. But to comment, forward or create new material, you will need to present your national ID card.

Needless to say, these rules will curb the growth rate for these sites. Instead of their old viral pattern of adding users on the fly, they will now have to register users one at a time, much as governments now register voters, gun owners or drug users.

That last point is closest to Beijing’s hatred of these sites, which it has already compared to drugs in terms of addictiveness and virulence.

The good news is that Chinese will not have to wait in line for a weibo account, but can simply beam a text message to the site from an already-authenticated phone as verification of identity.

Legacy users have three months to register, so look for a clean-up of dormant weibo accounts in mid-March.


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