Official media court investors in the quest for internet influence

PUBLISHED : Wednesday, 16 February, 2011, 12:00am
UPDATED : Wednesday, 16 February, 2011, 12:00am


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The websites of the mainland's three main official media - People's Daily, Xinhua and China Central Television - are accelerating on the road to the stock market in an effort to better compete with commercial news portals., the website of the Communist Party's People's Daily, plans to lead the way and launch its A-share initial public offering early this year, China Daily has reported.

But academics say the official news websites will have a hard time reversing their declining market share., the internet traffic tracker, says ranks just 46th on the mainland and 33rd, far behind, ranked fourth, and seventh. The three most popular websites on the mainland are search engine Baidu, internet portal and eBay clone Taobao, in that order.

With the emergence of internet services including microblog platforms and social network sites, online opinions have played a key role in shaping public debate on controversial incidents on the mainland.

Yang Binyan , a researcher at the Chinese Academy of Social Sciences' Institute of Journalism and Communication, said the government wanted to increase the influence of official websites, particularly during emergencies, when commercial websites, forums and bulletin boards were major sources of information and platforms for discussion.

'It is a trend that no one can avoid in the era of media convergence,' Yang said. 'If official news sites don't do that they'll lose out in swaying public opinions.'

People's Daily's website plans to compete by introducing wireless value-added services, online video and public opinion surveys, boosting revenue and building itself into an international multimedia platform. It launched a news search engine,, in December, hoping to rival Baidu and fill the vacuum left by Google's retreat from the mainland.

When People's Daily Online Co. Ltd., which operates People's Daily's website, was founded in June, propaganda minister Liu Yunshan urged the website to lead online news propaganda and sway public opinion.

But He Jiazheng , the former president of People's Daily Online, later told China News Service in September that official news websites were extremely difficult to run and 'could be successful only by combining capital, technology, talent and the market - all playing a crucial role in website development'.

That is why analysts and media workers have doubts about the state news websites' competitiveness, even after they are listed.

Analysts said all efforts at improving market share would be in vain if the state news websites stuck to their wasteful management styles.

Song Shinan , a media analyst based in Sichuan , said: 'It won't work if the authorities just splash out money and use their advantages in policies and resources. The core is to concentrate on producing content, improving communication channels and hiring talented employees.'

He said had too many editors and reporters - about 700 - and was inefficient. One package had to go through several rounds of approval, whereas a single editor could usually approve an idea at a commercial website.

Zhao Shuguang , director of the Media Survey Lab at Tsinghua University, said another problem was that salaries at official websites were significantly lower than at commercial websites and it would be difficult for them to retain talent.People's Daily Online plans to issue 40 million A-shares at 15 to 20 yuan a share through an IPO in Shanghai, according to China Daily, making it the first news website to go public in the domestic market.

The IPO plan is part of the country's efforts to convert state-owned enterprises and institutions in the cultural sector into market-oriented players in a bid to improve their efficiency. But it does not mean that the mainland's controls on online media, among the most sophisticated in the world, will be relaxed.

The State Council Information Office says the media organisations running the websites must retain at least 30 per cent of the shares. An editorial policy committee will be set up at each website to approve content.

Song said the authorities also had several other ways to try to sway public opinion online: issuing media censorship directives, hiring internet commentators to post favourable comments; and producing their own news products.

'The IPOs are intended to change only the way they operate, not the censorship system,' Song said. 'The official news websites are always more tightly controlled by the authorities.'

The State Council Information Office began pushing the official websites to go public in October 2009, with 10 lined up for listing. They included People's Daily, Xinhua and China Central Television websites and seven key local news sites either backed by the government or official print media groups: in Beijing, in Shanghai, in Tianjin , in Hunan , in Shandong in Zhejiang and in Sichuan .

Xinhua's IPO plan was approved by the central publicity department last year, while China Central Television's website merged with China Network Television in July in the lead-up to reform and listing.

The mainland has the highest number of internet users in the world. The China Internet Network Information Centre said last month that it has 457 million internet users, 303 million of whom browse the internet on their cell phones. Nearly 80 per cent internet users go to websites for news.

News websites are mainly grouped into three categories: those with official backgrounds and financed by the government; those of newspapers; and those of commercial portals mostly listed overseas, including Sina Corp, Sohu, Netease and Tencent.

The government will continue policies favouring government-backed websites for five years after they go public, a move to ensure a smooth transition.

Some websites, such as Xinhua's, will continue to receive Ministry of Finance subsidies for five years and will be exempt from corporate income tax and housing tax, China News Service reported.