Wednesday, August 24, 2011

Sina (SINA) Receives Warning on Weibo from Chinese Government Official

It appears Sina (SINA) is down this morning on an issue we've discussed a few times in the past, but the company has assured it has a handle on - the potential for their microblogging service (Weibo) to ruffle feathers in the highest reaches of government.  Youku (YOKU) was also visited but does not seem to be affected as much via stock price.

Per AP:

  • Sina received a veiled warning from a Communist Party leader over its popular microblogging service, Weibo. 
  • Beijing has been cracking down more aggressively on dissent in the wake of the Middle East uprisings, prompting web portals such as Sina to tread delicately. According to state-run broadcasts Tuesday, Liu Qi, secretary of the Beijing Municipal Party Committee and a member of the Party's powerful Politburo, had toured Sina offices on Monday and told executives that Internet companies should "step up the application and management of new technology, and absolutely put an end to fake and misleading information."
  • Liu, the party secretary, also visited the headquarters of Inc., a video portal, and talked with CEO Victor Koo, the report said.
In the short term, if this is isolated, no big deal - the larger issue is as Weibo grows in power, does the Chinese government take steps to curtail it in some form.

No position

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