Baidu (BIDU), Sina (SINA) to Keep China State Media Outlets in Check
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The Chinese population, which is the largest in the world, is getting online at an increasing rate, with companies like Xinhua, the People's Daily and Youku.com (NYSE: YOKU) increasing their Internet presence.
However the presence of companies like Baidu Inc. (NASDAQ: BIDU) and Sina Corp. (NASDAQ: SINA) will create challenges for the state-run companies that are adding features to attract users.
"Expanding into Internet services is both an opportunity and challenge for state-owned media," a China Central Television spokesman said. "Since the Internet market is a fully open and competitive area, state-owned media face difficulties and problems with low marketization and so on, compared with newly emerged private Internet companies."
Baidu has said that it welcomes increased competition, as the company owned 76 percent of the China search engine market share in the fourth quarter.
State-owned companies do have the advantage of more resources at their disposal, such as CCTV having exclusive access to events like the World Cup, as well as exclusive advertising resources.
"State-owned media companies have capital advantages, content advantages, and human-resources advantages … but lack influence," said Yu Guoming, a journalism professor at Renmin University in Beijing, according to the Wall Street Journal. "They are restricted by the traditional" communication patterns while private companies can respond to market demands. State media outlets "will never keep up with private companies."
However the presence of companies like Baidu Inc. (NASDAQ: BIDU) and Sina Corp. (NASDAQ: SINA) will create challenges for the state-run companies that are adding features to attract users.
"Expanding into Internet services is both an opportunity and challenge for state-owned media," a China Central Television spokesman said. "Since the Internet market is a fully open and competitive area, state-owned media face difficulties and problems with low marketization and so on, compared with newly emerged private Internet companies."
Baidu has said that it welcomes increased competition, as the company owned 76 percent of the China search engine market share in the fourth quarter.
State-owned companies do have the advantage of more resources at their disposal, such as CCTV having exclusive access to events like the World Cup, as well as exclusive advertising resources.
"State-owned media companies have capital advantages, content advantages, and human-resources advantages … but lack influence," said Yu Guoming, a journalism professor at Renmin University in Beijing, according to the Wall Street Journal. "They are restricted by the traditional" communication patterns while private companies can respond to market demands. State media outlets "will never keep up with private companies."
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