China Can Try, But It Can't Censor Its Social Web

What do Eric Schmidt, Mark Zukerberg and the Chinese government have in common? They've all made failed attempts to remove anonymity from the social web. For different reasons.
Last week, China announced the next phase of a censorship program that requires all social media profiles be registered with a valid phone number and state-issued ID number by March 16th. The government's stated intent is to create a better Internet society free of porn, spam and fraud, but we'd be stupid not to think that China isn't also trying to prevent social unrest, i.e. Egypt and Libya.

Regardless of China's intent, some Internet experts I've talked to say the censorship move will destroy the world's fastest growing social web community. As proof, they point to a price decline in shares of Chinese micro-blogging companies, and a significant decrease in new user registrations, such as Sina's recent drop from 20 to 3 million per month; many are spammers, but not all.
While I acknowledge the near-term effect on the financial and consumer markets, I highly doubt that China's new policy will ever achieve its stated social media goals. That's because the social spam cat is out of the bag, so to speak. Here's why.

1. Hundreds of millions of fraudulent accounts already exist. For example, Sina has 200 million registered users. In our primary research at Impermium, we know that social media networks have up to 40% fraudulent accounts. If this also holds true for Sina, then that's tens of millions of bad accounts, and our sources tell us the real-names policy will not be retroactive.
2. Certified accounts can still be compromised. We've witnessed many times that, when social networks crack down on new account registrations, the spammers turn their sites to existing ones. This is also true for real name-certified accounts. With 200 million users, we know a whole bunch of them have passwords like "1234," so expect to see a spike in phishing, password cracking and malware incursions onto accounts.
3. It's often hard to discern bad from good users. As we have found out here in the United States when Mark Zuckerberg and Eric Schmidt opposed anonymity, there are many upstanding Web users who prefer to publish from anonymous accounts. We expect that, in China, the market will respond with new, niche networks that evade the real-names policy.

So, no matter how strict China becomes in registering new users, I'm certain that it will never be able to quash anonymous and fake accounts that already exist. And for that reason, the government's attempt to require real names will be ill fated, just as it was for Facebook and Google+.