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SCMP Reporter

The move follows a call for the Chinese content providers to remove pornography

Major Internet portals in China are abandoning alliances with small  and individual Web sites in exchange for keeping business relations with China Mobile Communications Corp.

A high-level executive at a firm, which does business with China Mobile, said  China Mobile urged Internet content providers  earlier this month to eliminate pornographic content on SMS (short messaging services) sent to  users.

As a result, Internet content providers are breaking alliances with individual Web sites which are believed to be major sources of pornographic material.  China Mobile will also stop collecting payment for any non-mobile phone related services provided by the portals  from August 1.

This has confirmed a long-standing expectation in the industry. Word was out that China Mobile would take action in response to the Internet Information Service Regulation promulgated by the Ministry of Information Industry last month.

The regulation aims to stop  the popular but controversial pornographic content offered by Internet information providers via SMS supported by Monternet, China Mobile's roaming  Internet service.

The first of its kind in the country, Monternet technically enables data transmission between Internet and mobile phones in the form of text messages, music and pictures, and has  proven to be the savoir of China's sluggish Internet businesses by bringing  revenue to its  Net-originated SMS partners.

Driven by this strong revenue growth,  first tier Internet SMS providers including the top three portals, Sohu.com, NetEase.com and Sina.com have formed alliances with hundreds of small and individual Web sites to share their customer base in order to attract more  SMS users.

These individual Web sites which often use pornographic content to gain traffic became the major source of disapproved 'yellow' information on SMS. Such content includes adult jokes and advertisements promoting sex services.

Some portals have  reacted to China Mobile's requests. Sina.com has announced the termination  of alliances with individual Web sites and urged users  to  erase any content regarding these links.

NetEase.com has disconnected links to 'Extraordinary men and women' and Sohu.com has taken off 'Magic Baby', both contained adult information.

Definition of non-mobile phone related services will be determined by China Mobile,  the same source said.

E-mail and news on handsets  are two examples of what will be considered  mobile-phone related services, while registration  to an online club is not.

This means portals will have to give up the SMS products that are not approved by China Mobile since they completely rely on the firm  to collect service payments.

China Mobile collects  SMS payments for its partners and charges 15 per cent of the revenue as commission. This arrangement solves the difficulty of  collection due to  lagging electronic payment systems of banks in China and enables  portals to win  consumer business.

China Mobile in Hong Kong confirmed that  Internet information providers had been pressured to get rid of the pornographic content.

'My colleagues in China have been telling Internet content providers to  deal with pornographic information,' said Jacky Yung, China Mobile Hong Kong spokesman. But he  was unaware of the cancellation of non-mobile phone related service payment collection.

Internet portals do not seem concerned over  the changes. When asked whether  there will be a  negative impact on  performance, Charles Zhang,  Sohu.com chief executive, said:  '[It] has hundreds of different types of SMS and SMS-related services, a few lesser  will not affect  revenue.' Sina.com declined to  comment.

Sohu.com's second-quarter results  earlier this week showed its non-advertising revenues rose  354 per cent year on year to US$12.5 million, most of which come from SMS and SMS-related services.

Sina.com's SMS income  reached US$14.18 million, with  54 per cent sequential growth from April to June.

But the new policies might have a bigger impact on companies largely relying on SMS and porn SMS, such as Tencent.com and Tom.com, the source said.



Net portals dump links to soothe China Mobile