Content providers dealt blow by new rules
Updated at 4.57pm, Tuesday:
Mainland commercial portals, which depend on more liberal news reporting to attract readers, have been dealt a blow by tough new regulations released by the Information Office under the State Council and the Ministry of Information Industry.
The new regulations stipulate that the mainland commercial portals should only get news from domestic media sources under a signed agreement with the domestic source organisations, China News Service reported on Monday.
Recent surveys have found that online news is one of the most popular services offered by mainland ICPs.
Mainland ICPs are required by law to apply to the Information Ministry Office for approval to place overseas news sources and foreign media organisation IP links on their Web sites.
Industry insiders said that it could be more difficult for commercial content providers to get such approval compared with their official counterparts.
The new regulations also contained a range of penalties for ISPs which post information that threatens national security and other mainland interests, according to the news service.
Although many analysts claimed that ICPs like Sina.com would be the biggest victims of the new rule as it listed over 1,000 items of news a day, Sina.com said it would be unaffected..
''The government has consulted Sina.com over the feasibility of the new regulations and Sina.com has been working closely with the government to hammer out the regulation,'' Zhang Hongyue of the brand promotion department at Sina.com told SCMP.com.
Mr Zhang said the new rule would help create fair competition and a transparent market on the mainland as ''it will definitely clarify the uncertainty over what we can do and what we cannot do over the net''.
Mr Zhang said the regulations would boost the confidence in Sina.com's investors and push Sina.com further out of the red after a better-than-expected performance in the first quarter of fiscal year 2001. Sina's share price collapsed on Nasdaq due to strong policy concerns.
However, some analysts believed that new rule could increase the financial burden on ICPs like Sina.com because they may need to pay more to state controlled media for news.
Commercial portals had to work hard to convince their customers that their news services would be better than their sources.
Netease.com, another popular Chinese portal on the mainland said they would do whatever the government wanted and refused to comment further on the issue.