Rumors spread through the services created "huge damage" to individuals and to the government, which has posed a "serious challenge" for the government’s effort to filter information and control society

Sina refuted a rumor earlier today that it had failed in getting one of the four licenses that the government would soon require the Chinese Internet companies to continue with their twitter-like services.

"Last night some weibo users posted that the government will only grant four licenses for microblog services while Sina did not get one. It is a pure rumor and thanks for your concern," Sina said in a message to all of its weibo.com users.

It was reported that two of the licenses will go to the Internet departments of the official Xinhua News Agency and People's Daily and the other two to commercial private companies.

Shares of Sina fell 15.2 percent yesterdya, the largest decline in two years and closed at 92.76 U.S. dollars a share.

The plummet is perhaps due to the hearsay that Sina's weibo may embrace more government regulations for social stability concern, said Amit Dayal, a New-York based analyst with Rodman & Renshaw LLC's.

What's more, there are also some news flow about the VIE structure, which definitely is hurting Sina more than other names, Amit Dayal said.

The company is developing systems to simplify the control of content and make the social media tool a less of a risk to social stability, the Financial Times reported, quoting Charles Chao, chief executive of Sina Corp, which launched the weibo.com in 2009.

Rumors spread through the services created "huge damage" to individuals and to the government, which has posed a "serious challenge" for the government’s effort to filter information and control society, Mr. Chao was quoted as saying.

Sino Weibo is the most popular micro-blogging website in a country with at least 420 million Internet users. The popularity of the services, as well as its hard-to-control characteristic has made also made it a channel to express discontent.