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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.

Tuesday, March 19, 2013

Netease's replay to CCTV 315 investigative report, part 3

One may find part 2 of this article here:

From my write up in part 2, CCTV actually had a pretty good target. There are about 4 or 5 3rd party companies that somehow grab the user information as contained in the cookie file through back door. It is not very clear how those 3rd party company did it.

CCTV actually make this reporting much weaker by turning it into a hit piece against Netease. It is not clear why will CCTV want to do that.

I can only think of four reasons why will CCTV wants to do this.

1st possibility: It is part of a larger plot. Government is trying to send a signal to Netease and its News editors. Netease News is famous in China for being the "News with Attitude". But the possibility for this is very low. Government can just summon NTES's CEO to Beijing for some tongue lashing. In addition, other government agencies would have gotten into the act. It had been 5 days and no other government agencies had any corresponding measures against NTES. Therefore, this possibility is very low.

2nd possibility: CCTV's 315 editor is not professional. Actually, this is not the case. The overall CCTV shows may be of low quality. But the show 315 is actually of high quality. I personally think this possibility is also very low.

3rd possibility: CCTV's 315 show actually have more materials in their pocket. I also consider this possibility is very low. Why would any editor want to make their show of low quality to begin with? That doesn't sense at all. One could hold on to some evidence while still coming out with high quality product. 315 show editor is too smart for that.

4th possibility: This is the one I considered to be by far the most probable. CCTV's editors coming out with a very good investigative reporting on how unscrupulous 3rd party companies stole personal user information through the back doors of China's four major portals (Sina, Sohu, Ntes, Tencent). But the editors is being overruled by their managers. Sina, Sohu, and others purchased advertising slots on CCTV. All except one, Netease, are major purchasers of CCTV's advertising slots. For commercial reason, CCTV managers forced 315 editors to change the original program into a hit piece against Netease. I think the reason why the central themes so ambiguous is because 315 show editors have to change the focus of the show at the last second. The show never address the central themes. Why does NTES's emails have anything to do with a bunch of 3rd party companies steal users' cookie file? Why will NTES want to let those 3rd party companies steal their internal company information?

Of course, the above are only my conjecture.

Finally, Netease announced its official position on 3/16/2013:

I will translate below:
"Netease always protect user's privacy. As an company listed on NASDAQ, Netease has very strict system and technology to safe guard users privacy. We always obey all laws and industrial standards. We completely forbid any Netease organizations or Netease employees to read users email content. We always protect all citizens' constitutional rights of free and private information.

After reviewing CCTV's investigative reporting, and to completely remove any doubts by our users, Netease had established a special investigative team to investigate this matter. We will provide the result of our investigation at the earliest time. Netease wants to thank our users and CCTV for their attention and criticism. We offer our utmost gratitude for your continuous oversight."

Personally, I think it is a great reply. While I am pretty sure Ntes read the content of their users emails, it is machine that does that, not any individuals or organizations.

China is still a communist country. CCTV has the obligation to provide it users "proper guidance and to educate its users so the users can have the proper thoughts". CCTV and Netease News are not equal.

CCTV is still the most watched programs by far in China. Netease really shall spend some money to buy advertising slots on CCTV's shows. Hopefully, that will be the end of that.


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