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China's Twitter introduces fees

By - | June 20th 2012

Sina Weibo, China's biggest Twitter-like microblogging platform, has introduced a membership charge for premium features.

For a monthly fee of 10 yuan ($1.57, £1) its 300 million users can add personalised pages, voice posts and better security, among other services.

The move could help return the firm to profit. It posted a $13.7m (£9m) loss for its first quarter in May.

One analyst called it a "bold move", adding Twitter was unlikely to follow.
Sina Weibo is introducing a total of 15 added VIP features, according to the Tech in Asia blog.

It said the move built on other recent innovations added to the platform including social games and a virtual currency called Weibi.

One Beijing-based business consultant noted the decision to charge fees had followed government pressure on the business to boost efforts to filter out illegal posts by some of its members, increasing its costs.

"Weibo has become an indispensable tool to Chinese netizens, although some argue of late that it has become less compelling due to the restrictions," said Duncan Clark, chairman of BDA.

"But for Sina of course ultimately its aim is not to run the service as a charity.

"This could be a tricky situation - if they push too far to monetise they could tarnish their brand, but if they don't succeed in converting all this traffic to commercial value then it's ultimately unsustainable in the long term."

Brave move
While the move may prove a success for the Chinese firm, independent media analyst Mark Mulligan suggested it would be a mistake for western social networks to follow at this point.

"It's a very brave move, and I do not think it is likely that Twitter would follow a similar route, certainly not at this stage," he said.

"In order to start charging for something that people expect to be free, a company has to be very confident of its market position.

"Any social tool faces competition - Facebook has done a lot trying to emulate microblogging with its timeline features. If Twitter tried to [introduce fees], Facebook would capitalise on that and try to implement a much richer set of services entirely free."

He added that the dynamics were different in China and Sina Weibo might not be afraid of competition since other domestic web giants, such as Tencent and Renren, had also introduced membership fees for some add-on services.

A spokeswoman for Twitter said the firm did not comment on other companies, adding that its business model remained based on advertising.


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