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Porn Crackdown Gives Weibo More to Cheer

Stocks in this article: WB TWTR SINA MSFT

BEIJING (TheStreet) -- China's cyberspace nannies handed Weibo (WB) an unintentional gift in the form of a pornography crackdown Friday, one day after the mainland's Twitter-like (TWTR) service debuted on Nasdaq.

Weibo postings jumped thanks to a thread debating the pros and cons of the latest campaign against online lewdness launched by the government's Ministry of Public Security.

The handle #扫黄打非净网2014# -- which means "eliminate pornography and illegal publications, clean Internet 2014" -- drew so many posts that it was the top trending topic all day and well into the evening. Parents voiced support, romance writers complained.

The forum pointed to a Weibo strength as an authoritative outlet for government, company, police, celebrity and public service announcements. Most seekers of fast access to a nationwide audience use Weibo first, state media second.

It also highlighted two weaknesses: Chinese government censorship that's at the heart of the anti-porn campaign, and Weibo's reliance on hot news topics that stir emotions but steer clear of anything that might upset censors.

Sina works with police and is not shy about closing Weibo accounts that "spread rumors," a crime that can be subject to case-by-case interpretation. Moreover, Weibo users are invited to rat on suspected violators.

Meanwhile, Weibo benefits from compelling but safe topics that spark comments and threads.

In a report Friday about Weibo's IPO, the Chinese business magazine Caijing said postings linked to news about a Malaysia Airlines flight's disappearance were a key reason for a 9% month-on-month jump in average daily Weibo users in March. The rise to 67 million users a day was "closely related to Malaysia Airlines (news) and other big events," the report said.

News about the airliner search, which is continuing, fueled Weibo activity for weeks after the March 8 disappearance of the flight from Kuala Lumpur to Beijing with 153 mainlanders on board.

On top of Weibo's weaknesses, which indeed affect every media business in China, the online service and its parent Sina (SINA) have ample competition in the race for online communicators. Rivals include popular services run by Tencent such as QQ, Tencent Weibo and Weixin, also known as WeChat.

Although the government blocks Twitter, some mainlanders use VPNs to access it anyway. Chinese also communicate online through Microsoft (MSFT) services Skype and MSN Messenger, which was killed in other parts of the world but still lives in China, and various smartphone apps.

So far, must-have information and compelling forum topics have helped Weibo ride high in this sea of communication options, and amid information restrictions. Now, to keep stock investors happy, it will have to keep the ball rolling.

That may be difficult at times, as shown by Friday's Weibo activity. Trending topics ranked below the porn crackdown late Friday were, in descending order, the death of author Gabriel Garcia Marquez, news about the Weibo IPO, and a thread answering the question, "What's your favorite food from your hometown?" At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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