Internet, Law & Policy

No News Is Good News For Netease In China

"Panem et Circenses" (bread and circuses) was used in ancient Rome to curtail revolts and appease the citizenry. In today's China, online Web company Netease.com has also decided that engaging in public services like news dissemination is too destabilizing, so it has chosen to move away from news and concentrate instead on online games that appease the masses and the government.

Netease.com is one of China's oldest Web firms, and began in the late 1990s as an email product that cloned the services of U.S.-based Hotmail.com. It grew over the years to be one of the key destinations online for Chinese netizens, but today its news operations reportedly only contribute about 6% to the company's revenue.

To make matters worse, in recent months the Chinese government has made news dissemination much more difficult for Web companies. Online news hosts must now be licensed and much of the news must come from government-endorsed press releases.

So now Netease.com is planning to either spin-off its news division in a US$300M IPO or look for interested buyers for the operation, according to local media reports.

By distancing itself from its news business, the Web company hopes to instead focus on online games.

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