Today, 1/5/2009, 7 separate department agencies announced that 19 Chinese internet companies have pornography on their web sites. See the following four articles on their announcement:
19 web sites (and their offending departments) having porn contents are listed below:
1. Google. Web search and photo search. The company didn't remove pornographic contents even after been notified.
2. Baidu. Baidu Bar, Baidu Space and web search. The company didn't remove pornographic contents even after been notified.
3. Sina. Sina Album and Sina Blog. The company didn't remove the pornographic contents in a timely fashion after been notified.
4. Sohu. Sohu Album, Sohu Blog, and Sohu Forum. The company didn't remove the pornographic contents in a timely fashion after been notified.
5. Tencent. Photo search, QQ Album and QQ Space. The company didn't remove the pornographic contents in a timely fashion after been notified.
6. Ntes. Ntes Album. The company didn't remove the pornographic contents in a timely fashion after been notified.
7 to 19. 13 other very famous Chinese web sites. Most of the 13 internet companies didn't remove pornographic contents even after been notified.
First of all, it is a very strange announcement. Basically, 7 government agencies just pick the 19 most important internet companies in China and say that they have pornographic contents.
Rather than going after the real porn sites in China, they just pick the easy target. It seems like a big boss said 「We need to get rid of x-rated content in internet」. Therefore bureaucrats from 7 departments form a tiger team. Like all fumbling bureaucrats, rather than going after the real culprits, they just pick the 19 largest web sites in China.
Especially weird is their accusation against the portals. For Sina, Sohu, Tencents, and Ntes, they are not being accused of carrying pornographic contents. They are been accused of not taking down user-generated pornographic contents fast enough.
If that is the new standard, I don't think any web sites in the world can pass the test.
Well, I am not sure what those idiots from the seven bureaus want to accomplished. Without those 19 companies, there is no internet industry in China. There is no way other powerful government departments will tolerate that.
Note that the government notice didn't mention any thing specific about punishments. In the notice, they want the China Internet Association to do a better job to do 「industry self-regulation」.
Most likely, it will result in what Chinese called 「big thunder, no rain」, ie., a big hoopla about nothing. That way the 7 departments look good in front of their boss by going after the 19 biggest internet companies (in appearance only). The 19 companies give the bureaucrats some verbal commitment while nothing much really changed. Nobody will be hurt and nobody's interests will be affected, so that these 7 departments won't have to face any backlash.
Now, in the extremely unlikely circumstance that the government will close all the specific company departments mentioned in the government notice, let's see what the worse case scenarios are:
1. Most affected:
Google: They are search engine in China. Without web search, they are done in China.
Bidu: They are search engine in China. Without web search, they are done.
2. Some affect:
Sina: They are number 1 in Blog in China. They also make some money from Blogs. They will not be affected in any serious way even if they are forced to close down Blogs and Albums.
Tencent: They have a popular QQ Space. Again, similar to Sina, there will some some minimal though negative affect if they are forced to close down QQ Photo search, Album, and QQ Space.
3. Minimal affect:
Sohu: They are either number 2 or 3 in Blogs in China. But I don't think they got much (if any) money from Blog, Album, and Forum. I think they are still in the process in attracting viewers, thus they are not in monetization stage yet.
4. Silver lining
Ntes: I don't think Ntes make any money from Album. But they do spend money on severs and man-power to maintain those servers and to monitor illegal contents. If they are forced to close down the Album department, it would mean increased profit margin.
About this Blog
The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.
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