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What China’s Online Media Crackdown Means for Toutiao’s Owner

For foreign investors in China’s tech sector, Beijing’s crackdown on the country’s most valuable media startups is a reminder that the success of their bets could hinge on the whims of the Communist Party.

On Tuesday, China’s media regulator ordered Bytedance, the $30 billion startup that operates the popular newsfeed app Toutiao, to permanently shut down one of its apps called Neihan Duanzi, a platform for short videos, GIFs and jokes. The regulator cited “vulgar” content. Separately, Toutiao and three other rival newsfeed apps were temporarily removed from Chinese app stores earlier this week. Two other short video apps run by Bytedance and rival Kuaishou were suspended temporarily last week.

“When you operate in China, you are operating in a gray area,” said a partner of a China-based venture capital firm that invests in online content startups. Internet companies’ success depends in part on their ability to read the wind and figure out how to navigate the shifting political landscape. “The question is: Are you ahead of the curve, or are you behind the curve?”

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